Joe Mal - Misc.

A Brighter 2003, Hopefully

Looks like that's what most pundits were saying this time last year. But come on, we had to have hit bottom, right? From what I've read, looks like the first half of 2003 will be more of the same - volatile swings of 20% or more. Wall Street hates uncertainty and Iraq will be the big question mark for a few months at least. But have faith, the second half should not only stabilize but grow - probably giving the overall market a 10% rise. Economic conditions are good overall and history is on our side - not since the Great Depression have stocks dropped four years in a row.
But where to put your money now? As I always say, diversify first. But looks like dividend yielding stocks will be "in" this coming year. That means value stocks, in particular large cap value stocks. Of course, that's the safe bet too. Another factor that will help - with O'Neal out as Treasury Secretary, looks like the Bush administration will trim taxes on dividends.
They also say that small caps, again value, lead the market out of a recession. Does this mean avoid growth stocks? Not really, only because they've been beaten up so bad they're almost considered value stocks. But with all the mistrust of the market, companies that offer shareholders dividends, are likely to gain the favor of investors.
Another note, I've been hearing for the past few years that Europe was primed to explode the way the US market did during the 90's. Looks like that's no longer the case. WIth Germany leading the way with huge labor problems, Europe is expected to lag behind US growth the year or two. The Euro hasn't helped as many thought it would. So for the short term avoid European funds & stocks.
Bonds and real estate have probably peaked. Money market returns are next to nothing. That leaves stocks as the best option. So if you get your money back in the market before next summer, it's a safe bet you'll have positive returns. But remember, it's still betting.