The following are highlights from the Third Quarter 2010 issue of Investments: The View From Lowry Hill, our quarterly investment newsletter providing insights about the markets and the economy:

• The U.S. economy has staged a modest recovery in recent quarters, with corporate America exhibiting strength in earnings and cash flow.  That favorable backdrop is being overshadowed by concerns over the public and private debt overhang, as well as other structural issues that ultimately need to be addressed.
• With heightened investor concerns, volatility has increased but can be managed through appropriate asset allocation.
• Subsequent returns are dependent on the current starting point and expectations for the future.  After the recent correction, the average stock has fallen below its longterm average price-to-earnings multiple--providing an opportunity for stock price increases to come from an improved multiple when investor confidence returns.  While stock returns may be less than historical averages given lower growth prospects, they may still be better than the alternatives.
• Significant tax changes are looming, but it is premature to postulate about possible outcomes on investment portfolios.  As the year progresses, we plan to meet with our clients to discuss their individual situations.

Articles

Speeches

Financial Planning:
The View from Lowry Hill

Investments:
The View From Lowry Hill

2010 Annual Client Letter [pdf]

Past issues of Investments: The View From Lowry Hill