A sound piece of stock market advice counsels to invest in such a way that you can sleep like a baby, which is exactly how one money manager sleeps – he wakes up every two hours and cries.
That anecdote was among the lighter moments from this year’s Orange County Public Company Forum, where more than 200 business leaders heard perspectives on the market from NASDAQ Chief Economist Frank Hatheway, as well as thoughts from a panel that included a vice chairman of Bank of America Merrill Lynch, two public company CEOs, a hedge fund chief investment officer and a partner in the corporate and capital markets practice of an international law firm.
First, the economy, according to Dr. Hatheway: “Things are not so bad, which is very good news, particularly in light of recent fears that the economy was on the precipice of a second recession.” Hatheway said the “outlook for the U.S. is improving, albeit slowly and unevenly.” He noted that industrial production has been steadily rising since mid-2009, although he also expects to see interest rates rise modestly and continued weakness in the dollar.
And second, the consensus on the stock market was similar to that of the economy: The entire panel expects the markets to continue to improve during the next 12 months, with predictions that ranged from 3% to 10% growth. Looking out even further, Cary Thompson, vice chairman of Bank of America Merrill Lynch, said he expects 3-5% annual growth for the next five to seven years. Thompson also noted that the deals thus far in 2011 have been significantly larger than in 2010.
Given the choppiness of the expected growth, you may want to heed another piece of advice: Don’t watch the stock market every minute of the day, and take it slow and steady for a good night’s sleep.
The annual event, now in its 14th year, was sponsored, in part, by PondelWilkinson, along with NASDAQ OMX; Paul Hastings; Bank of America Merrill Lynch; Deloitte; R R Donnelley; Woodruff Sawyer; NIRI Orange County; Mackenzie Partners; and the Forum for Corporate Directors.
— PondelWilkinson, firstname.lastname@example.org