Remember the market tries to anticipate what is going to happen in 12 to 24 months. Interest rates are declining rapidly. This trend is anticipated to continue. The inverse interest rate curves that we have enjoyed over the past several months are in the process of correcting themselves. As a result the stock market is once again going to be the only game in town.
Current evidence implies a continued flow of money into mutual funds and equities.
Therefore we are now recommending a more aggressive investment posture. The dot com bubble has burst and the hyper PE ratio hysteria has also undergone a dramatic correction as evidenced by Cisco and Lucent. There may still remain more downside in these stocks. Cisco is still selling at a PE over 47 while its markets are being attacked from all sides. In addition rumors on the street say that its lease sales may be impacted by bad debts.