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Market primed for investing, says Witt
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| Presentation: Eric Witt of Edward Jones speaks at last week's chamber of commerce breakfast in Benson. (Thelma Grimes/photo.) |
Thelma Grimes/San Pedro Valley News-Sun
While businesses and residents may be nervous as the nation recovers from recession, Eric Witt of Edward Jones told a Benson group last week that this is the time to invest.
Witt was the guest speaker at a breakfast hosted by the Benson/San Pedro Valley Chamber of Commerce. About 30 business owners and residents attended what will become a quarterly event.
Witt spoke about the current state of the economy and what is expected as America recovers over the next few years.
Witt said economists were encouraged in late 2009 when there were positive reports in the third quarter for an increase in gross domestic product (GDP), and in the fourth quarter, a 5 percent increase.
"Confidence in the market is slowly being restored," Witt said.
With no predictions of negative GDP growth in the near future, Witt said the other issues to consider are inflation and the growing unemployment rate.
Inflation currently sits flat, Witt explained, noting that the Congressional Budget Office has estimated the nation's deficit will increase to $19 trillion during the next 10 years.
"That's not going to be sustainable, so there have to be tax increases or cuts in spending," Witt said. "Hopefully, they will cut spending."
However, Witt said even though things are bad right now, if prospective investors wait to enter the stock market until the economy recovers, it will cost more. For those who got out of the market, Edward Jones is recommending that they consider getting back into it systematically over a period of time. For others, the company recommends buying and holding investments as the market rises.
"The bad news today is a lot different than it was a year ago," he said. "You can't recover if you are not invested."
In looking at investment options, Witt briefly discussed stocks and bonds.
One of the popular investments right now appears to be gold, but Witt cautioned against following that trend.
"I really hesitate on gold," he said. "Gold had a great run over the last couple of years, but you don't want to chase history for returns."
He recommended in-vesting at most 5 percent in gold and seriously consider international equities.
Investing internationally could be beneficial because of devaluation of the dollar.
"When international investments rise and the dollar falls, you are still making money," he said.
In the short term, Witt said international investments are more volatile than gold, but in the long term, they aren't.
To end his presentation, Witt discussed the value of bonds, which he called a fixed source of income.
"If inflation remains flat, it's good to have a fixed income," he said. "Bonds are a fixed rate; it is like you are loaning a company money, and they pay you back. It works as long as the company is still around."
In summary, Witt said things may seem bad right now, but the stock and bond markets both have some "pockets of value" right now, and can help residents and businesses get back on track to saving for the future.
While businesses and residents may be nervous as the nation recovers from recession, Eric Witt of Edward Jones told a Benson group last week that this is the time to invest.
Witt was the guest speaker at a breakfast hosted by the Benson/San Pedro Valley Chamber of Commerce. About 30 business owners and residents attended what will become a quarterly event.
Witt spoke about the current state of the economy and what is expected as America recovers over the next few years.
Witt said economists were encouraged in late 2009 when there were positive reports in the third quarter for an increase in gross domestic product (GDP), and in the fourth quarter, a 5 percent increase.
"Confidence in the market is slowly being restored," Witt said.
With no predictions of negative GDP growth in the near future, Witt said the other issues to consider are inflation and the growing unemployment rate.
Inflation currently sits flat, Witt explained, noting that the Congressional Budget Office has estimated the nation's deficit will increase to $19 trillion during the next 10 years.
"That's not going to be sustainable, so there have to be tax increases or cuts in spending," Witt said. "Hopefully, they will cut spending."
However, Witt said even though things are bad right now, if prospective investors wait to enter the stock market until the economy recovers, it will cost more. For those who got out of the market, Edward Jones is recommending that they consider getting back into it systematically over a period of time. For others, the company recommends buying and holding investments as the market rises.
"The bad news today is a lot different than it was a year ago," he said. "You can't recover if you are not invested."
In looking at investment options, Witt briefly discussed stocks and bonds.
One of the popular investments right now appears to be gold, but Witt cautioned against following that trend.
"I really hesitate on gold," he said. "Gold had a great run over the last couple of years, but you don't want to chase history for returns."
He recommended in-vesting at most 5 percent in gold and seriously consider international equities.
Investing internationally could be beneficial because of devaluation of the dollar.
"When international investments rise and the dollar falls, you are still making money," he said.
In the short term, Witt said international investments are more volatile than gold, but in the long term, they aren't.
To end his presentation, Witt discussed the value of bonds, which he called a fixed source of income.
"If inflation remains flat, it's good to have a fixed income," he said. "Bonds are a fixed rate; it is like you are loaning a company money, and they pay you back. It works as long as the company is still around."
In summary, Witt said things may seem bad right now, but the stock and bond markets both have some "pockets of value" right now, and can help residents and businesses get back on track to saving for the future.
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investing wrote on Feb 14, 2010 4:00 PM: