Most Popular ArticlesJune 23, 2009
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
A list of Dan Richards’ previous articles appears at the end of this article.
Below is a template for a mid-year note to clients. For background on how to use this template, see Dan Richards’ companion article, A Mid-Year Letter to Your Clients. Note to advisors: Please remember that this letter is intended as a template only; be sure to take the time to modify this to reflect your personal views.
For many of us, July 4 is the official beginning of summer.
It also marks the half-way point of the year. Looking forward, I am cautiously optimistic – and want to share some thoughts on where markets stand today and what I’m recommending right now.
Where we are today
If you asked forecasters in early March about the prospects for the economy, you would have heard some very dire predictions – this was when the conversation about the possibility of a depression or Japan-like lost decade was at its loudest.
Although we still face significant challenges and there’s no shortage of negative forecasts, the consensus view is that that the worst is behind us:
- While we are still seeing some tough news on job losses and corporate earnings, it appears that global economies have generally stabilized and early March was the point of maximum fear and pessimism. Since the market bottom on March 9, we have seen markets rise by about 40%
- Consumer and business sentiment has shown modest improvement and some important economic indicators have gone from negative to neutral and in some cases positive. Much has been made of the so-called “green shoots” pointing to early signs of recovery.
- While businesses are still cautious, access to lending has improved and we are seeing some positive prospects for a resumption of economic growth. Even in the face of worsening global growth projections from the World Bank, the current forecast is for the U.S. to exit its recession in the second half of this year and for modest growth in 2010, followed by a return to stronger growth in 2011.
As an example of the improving outlook, here’s a June 16 report from Wall Street Journal on an upgraded estimate for U.S. growth prospects by the International Monetary Fund:
WSJ.com - IMF Upgrades Its View of U.S. EconomyDisplay article as PDF for printing.
Would you like to send this article to a friend?
Remember, if you have a question or comment, send it to .
