Investment News
While the S&P 500 and Nasdaq are up for the year after a rough stretch earlier in 2010. Investors are concerned over the growing evidence that the U.S. economic rebound wouldn’t be very sharp. But a sense of calm is now returning to stock markets.
Fears of a massive defaults in Europe are no longer the top headlines and investors seem to be taking comfort that just means interest rates will not raise appreciably in the near future.
John Norris, managing director of wealth management with Oakworth Capital Bank in Birmingham, Ala., also thinks stocks have a little more room to run. But he’s hardly a wide-eyed optimist.
He said that stocks are the “path of least resistance” now. Basically, the U.S. stock market is the least troubled of any major asset class.
“Where else would you want to invest? Bonds have had a nice run but nobody’s enamored with Treasurys anymore because of the capriciousness in Washington. You have to be in stocks by default,” he said.
Norris said the good news about stocks is that the market is not “overly expensive” right now. But he’s quick to add that stocks aren’t “overly cheap” either. The S&P 500 trades at about 15 times 2010 earnings estimates.
