The information reflects the views of
John Browning as of 3/17/08 and may change in response to changing circumstances and market conditions and may not actually come to pass. These comments are not necessarily representative of the opinions and views of the firm as a whole and do not purport to represent a complete picture of the marketplace nor the future performance of any Van Kampen product.
The comments should not be construed as recommendations, but
as an illustration of broader themes. Past performance is no guarantee of future results.The markets have once again entered a time of incredible uncertainty -- and to some extent mistrust. The economy has been in this situation before and the markets have survived, and I believe we will survive this situation as well. Past experience has taught many investors – including myself – that knee jerk reactions such as selling it all – or buying it all – generally tend to end badly.
For the astute investor, keeping a clear head and a long-term focus is essential. This type of investor can, I believe, find some opportunities for investment right now. The important thing to do is focus not on where the market is today but where it might be in the future. This invariably leads me to look for trends and patterns. This is where I currently see some developing opportunities in the future.
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The U.S. government is interested in stimulating the economy no matter who wins the elections. Traditionally this has been done through reduced taxes or government spending, particularly on infrastructure projects. I don’t expect to see additional tax cuts after the most recent rebate checks arrive – so look for opportunities in infrastructure and the industries that support infrastructure development.
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Technology continues to race ahead regardless of what is happening in the financial markets. This may include anything from biotechnology or nanotechnology to new computers and telecommunications technology. Taking advantage of future opportunities to buy solid proven companies in technology related fields at what may prove to be discounted prices is a good one.
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Investments in energy and new energy technologies capitalizes on the continuing trend to develop new and existing energy reserves. This trend is being driven by government regulations and the growing level of concern over global warming.
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The trend towards new sources of energy also ties into the potential for investments in the agricultural industry to do because some of the new energy technologies continue to be tied into agriculture. Further, as the global population grows there is simply more demand for food and the ability to grow it more efficiently.
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With all these trends and investment themes, another overriding theme is to think and invest globally. The trends in the markets often center around the U.S. and that is certainly not to be ignored, but increasingly the global community plays an expanding role. Global fixed income in particular is an area where the astute investor may find refuge from some of the volatility while taking advantage of the falling dollar.
In summary, I believe that in order for the U.S. economy to turn the corner we need to see someone or some entity step up and “pay the bill” for past missteps. Who made those missteps or caused the problems seems of little concern at this point. The current situation where a major Wall Street firm has failed, a major U.S. bank has, with substantial help from the Federal Reserve, stepped in to pick up the pieces indicates to me
that the Fed and others are willing to start the process of “paying the bill.” While we may still have a long way to go, I think this is a good start on what I believe is the road to recovery.
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