A new year means a new realm of possibility. Despite the grim outlook at present, our portfolio managers are still speculating what might happen once the market rebounds. Portfolio Manager Kenneth Solow has his ideas:
Mr. Solow: Looking forward into 2008, we are wondering, if the economy does rebound, if we’ll get something other than what the consensus expects. If we get some kind of a pickup in growth in the second half of 2008, if it turns out that bonds are pretty much over-bought and we get a reversal in the fixed income portion of the portfolio, can we get returns out of the alternative section of our portfolio? Today, our alternatives include a number of different securities, one of which is a commodity futures fund that mimics the Dow Jones-AIG Commodity Futures Index…. We also own international real estate through a mutual fund. …Whether these positions will continue to actually add value in these volatile markets, and whether they will continue to reduce portfolio volatility while doing so, is to me, a key theme going forward, and we will be watching very carefully to see if that portion of the portfolio continues to work for us in 2008.
For the full investment strategy issue, including an outlook for 2008 from a variety of investors and stock picks, click here.