Growth Mode

The panic has (mostly) subsided, so it’s time to take lessons from the stock market collapse of 2008 and try to rebuild net worth.

J.D. Loden, owner of J.D. Loden Wealth Management, has noticed that clients are asking more questions about stocks and investment choices and are looking closely at their portfolios, all strong signs to him. Low-risk investments have been popular in the latter part of 2008 and 2009, but with returns below 1 percent, many people are eager to get off the sideline and back in the market.

Loden and two other area wealth managers—Patricia Hulbert, senior vice president-investments with Leonard and Co. in Bonita Springs, and Tom Moran, founding partner and director of investments for Moran Asset Management Group in Naples—share their insight and advice for the coming year.

Will we be in a state of recovery in 2010?

J.D. Loden: The markets have made obviously significant moves from the abyss, and it seems to me that we’ve formed a bottom. There are two thoughts out there: Are we having a “V” recovery or a “W” recovery? I probably am in the camp of a “W” recovery in that we are going to have continued struggles.

For the last several months we’ve been worried about our domestic markets and recovery in the financial markets. Now we’ve got some geopolitical issues (such as the Israel situation) that could potentially drag on the markets. The decision of the Obama administration to withdraw the missile defense system that was to be deployed in Eastern Europe will back Israel into a corner. The U.S. will need Russia and China to use their leverage on Iran. The U.S. administration also has delayed a decision on the military’s request for additional troops for Afghanistan. It worries me that our new administration is hoping that diplomacy will prevail in these dangerous situations. The financial markets don’t like uncertainty, and anything that could heighten tensions could put a strain on the markets and the recovery.

Patricia Hulbert: The indications are that we are now in the beginning of a recovery. I think we will see slow growth, starting with businesses, over the next two to three years.
Tom Moran: We’re seeing signs that the economy is recovering. Historically, when coming out of a recession, the market usually starts to react several months before. The market tends to do well for a period of years following
a recession.