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Election Day

11/05/2009


Tuesday, November 3rd is Election Day. Speaking of elections, let's remember that the pricing in our capital markets is actually a voting mechanism by investors. Investors have been voting "YES" all year to "reflation" and "NO" to Armageddon. Visit Stub Hub and check out the current World Series prices and logic will tell you that the bearish perception of the world certainly isn't reality.

I loved last week's price action, as it did exactly what it should - defy logic and confuse the crowd. You see, from Labor Day until the moment when CC threw out the first pitch of the World Series was supposed to be panic time - sell baby sell. It wasn't! We actually survived the anticipated meltdown. Now, here comes November, a historically strong market time, and, to defy logic, here comes panic time.

My advice to investors is to let the pessimism build - let others panic; let the crowd begin to talk about a return to the dark days of earlier this year. Successful investors need to stay focused - keep your eye on the ball.

Yes, investing will be getting tougher; the past six months have been about "all boats rising."  I see this moment as an inflection point when not all boats will rise together. However, the truly strong boats will rise and sail strong. Whether a currency, equity, or bond, no longer will all be created equal.

All year I have talked about 2009 = 2003, in terms of market performance. I am beginning to think that 2010 = 2004 where investment opportunities will exist in all asset classes.  The capital markets, however, will make investors work much harder to figure out the best investment in each of those asset classes.


Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.