Russ Koesterich, Barlay’s Chief Investment Strategist, said in a video that they posted on their ishares website (view video below) that he believes we are going through a secular bear market. A secular bear market is a long period of time where stock returns are below average, inflation is high, and bond returns are low. Koesterich gives a lot of good advice to investors whether were in a secular bear market or not. He advises diversification and the importance of hedging your fixed income against the high inflation rate, especially since Treasuries are yielding below inflation. His wise advice seems to be honest and transparent. He does highlight some of their products, but also advises some to avoid other products, like Treasury bonds.
This is why I believe we are not facing a long term bear market. Goldman Sachs is getting a $5 billion investment with potentially $5 billion more investment from Warren Buffet. The financial sector has been dealing with this one huge problem, which i discuss in a previous blog. Microsoft and Nike announced a multi-billion dollar stock buyback program. Microsoft was given a AAA credit rating by Moody’s. To us, this signals that business models who receive cash for providing products or services are weathering this market with steady earnings.