“It’s tough to make predictions, especially about the future.” Yogi Berra’s wry observation enjoyed particular resonance in 2010 as the strength of the equity markets’ advance far exceeded consensus expectations. Annual market forecasts are challenging enough under normal circumstances, to say nothing of the unique environment of the past few years. The roller coaster market of 2008-2010 is a vivid reminder that near-term economic forecasts are unreliable predictors of investment returns, because of the market’s ability to anticipate changing economic conditions well before they are widely evident. As we look ahead the economy is strengthening, but the major indices have nearly doubled from their 2009 lows; dutifully anticipating the rebound in the U.S. and global economies. While some are beginning to question the remaining potential stocks might hold after such an advance, our disciplined selection process is still indicating an ample number of worthy total return opportunities.

To continue reading this issue of Perspectives, click here.