A finance professor at San Diego State University since leaving Miami University (Ohio) in 2005 after 27 years there, Dan Seiver has coauthored books on regional economic policy and investment strategy and is SDSU’s resident expert on currencies, employment numbers, inflation, interest rates, monetary policy, the stock market, general economic matters, and U.S. debt, deficit and fiscal policy. An author and co-author of more than 20 articles and notes in professional journals including American Economic Review and the International Economic Review, he is also the editor and publisher of the investment newsletter “The PAD System Report.”
What are your thoughts on stock market performance for the coming year? Are you more bullish or bearish for 2011 and why?
I think the market will gain again in 2011, but I do not expect a big rally. We should have at least one or two bone-jarring selloffs during the year, too. I am not as bullish because the market is no longer underpriced, and in fact is a little frothy right now as the DOW approaches 12,000.
What asset classes, industries or companies are you embracing and/or avoiding? Are bonds as secure as people think? Are there returns still to be made in shares?
I still think all aspects of technology are the places to be for the long-term investor. A few of these companies I recommend are still relatively cheap at current prices. I would avoid long-term Treasury bonds, because I think their yields will rise more this year. Muni bonds have more risks than ever before.
What can we learn from the most recent wave of earnings reports about what to expect in upcoming quarters or the condition of the economy?
The economy will continue to grow, and probably at an acdelerating pace. Corporate profits will be strong. At some point, we will begin to make a dent in unemployment, so that the average American can finally participate in this recovery.