The stock market remains bullish and will continue to present significant investment opportunities in 2010, according to the latest report from Zempel Strategic, a Fox Point-based economic and applied financial analysis firm. The company was founded by Claire Zempel, an economist who formerly served as director of investment policy, chief investment strategist and chief economist for Robert W. Baird & Co. Inc.
“The strategic investment implication is that investors should set their portfolio allocations to
common stocks to their maximum comfort levels,” Zempel writes in his January update to investors. “The tactical investment implication is that investors should consider market declines or ‘corrections’ to be ‘buying opportunities.'”
Rising commodity prices throughout 2009, falling unemployment insurance claims since last March, and the recent rise in the ISM Manufacturing Purchasing Managers’ Index point to a continuing bullish trend in the stock market, Zempel writes.
“The stock market continues to look quite cheap from a broad historical perspective,” the report states. “Whenever low-valuation extremes were reached in the past, the stock market tended to rise sharply over the next 3-5 years. That is the reason that we have recommended since last March that investors with extended time horizons (two years and more) should raise their allocations to stocks. Since the Zempel Strategic Stock Market Model turned bullish in July, we have also recommended that investors with shorter time horizons should increase their allocations to the stock market. Both recommendations remain in effect.”
For more on Zempel Strategic, visit www.zempelstrategic.com.
