Monday, January 7, 2008

The stock market is going sideways. Is everyone doing something about it?

See this quote:

the strategist has been advising investors to lighten up on small-cap U.S. stocks, emerging markets, value-oriented strategies, and energy and commodity plays. His forecast for a global corporate earnings slowdown steers him to shares of large, dividend-paying companies with steady earnings, plenty of cash and a multinational footprint.

Merrill's sector picks include: Large-cap U.S. growth stocks, including established technology companies and leading exporters; developed European markets, and defensive sectors such as consumer staples and health care that can also deliver solid results. You can find these types of stocks in low-cost mutual-funds like Vanguard Primecap Core (VPCCX or the exchange-traded iShares Russell 1000 Growth Index (IWF).

"The economy is slowing and there's a premium for growth and earnings," says Jim Swanson, chief investment strategist at mutual-fund giant MFS Investment Management. "The market is saying maybe value isn't the best way to invest now. Companies with growth metrics are starting to do better; I think that trend can continue for two or three years."

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