Martin Barnes on the Investment Future

Martin Barnes is the man behind BCA Research. I've followed his work for over a decade. His analysis is always well researched and sensible. Barron's interviewed Mr. Barnes over the weekend. Let's see where he stands on the big issues of today...
Barnes on investment returns going forward..."The journey toward low inflation from high inflation gave us the great returns, and now that we are at the destination, it is not half as much fun... A balanced portfolio could get 5%, maybe - a portfolio of 60% stocks, 30% bonds and 10% cash could give you those kinds of numbers...
Barnes on oil..."Even oil at the $40 to $45 level is quite a high price compared to what people might have expected a few years ago. It is a high enough price that oil companies would still make a lot of money. It will still make energy a good sector to invest in. It is certainly one of our favorite sectors from a long-term structural point of view.
Barnes on housing prices..."Down the road, there is a U.S. consumer recession lurking and a big housing downturn. It could be five years down the road....
Barnes on the dollar..."[Strength in the dollar] is sustainable for as long as the Fed is tightening and the U.S. economy is perceived to be strong... The dollar should have a relatively firm year this year, barring some unexpected shock.
Barnes on inflation..."Inflation is going to be low for the foreseeable future... We've had the perfect inflationary mix, and yet we haven't really had any inflation despite that. If you look around the world, there's no evidence of inflation at all.
Barnes on Alan Greenspan raising interest rates..."Money is not as tight as it seems... Bank lending is growing at double-digit rates. House prices are through the roof. There is money available for deals. None of these trends are consistent with tight money. Money policy is not yet restrictive."

Post a Comment