[lookout123]

Originally Posted by marichiko

Just curious. Aren't people more likely to make investments when they feel comfortable about the direction of the economy, rather than when they don't? I'm not trying to imply that you, personally, Lookout, would deliberately mislead clients, but might not some higher up see it as in the financial industry's best interest to paint an over-all rosey picture?

no - serious investors (read dedicated, not necessarily wealthy) are concerned about the long term, not short term. putting unrealistic expectations in an investor's mind is the fastest way to make sure they are dissatisfied and will pull their money rather quickly. the financial industry, as a whole, doesn't really care who is in office, or any of the other thousands of concerns that most of us think matter (i.e. unemployment, inflation, deflation, outsourcing, etc...) if they have accurate info they can make adjustments to the portolio and if they are properly balanced, it doesn't matter what the economy is doing they are poised to gain.

When it comes to indivdual stocks, sure, its important to be as accurate as possible, but the individual you quoted seemed to be writng in a general sort of way.

the article was not an in depth analysis meant to change anyone's course of action. it was just general info, one article in a series. more of a reassurance that "yes there are problems, but not as bad as you might think from listening to the talking heads" type of thing.

Without giving away valuable secrets, how would you advise your clients differently in a "the economy is going to hell" versus "everything is only going to climb to the skies" scenario? Based on the article you gave us, would you advise clients to buy stocks in any US textile company that by some miracle still does its manufacturing in this country?

i advise the same thing no matter the condition of the economy - balance. if an individual is properly balanced it doesn't matter what the economy does, they are going to come out ahead. balance and diversity are the key to successful investing. diversity doesn't just mean different though. one should be diversified by industry, sector, and category. it isn't hard, it only requires the discipline not to follow the crowd.
but to be clear - no one is saying that we are in a market boom period. we are, however, in a bull market.

So if the financial community doesn't trust government sources, how does it get its data to make predictions? Isn't that frightfully expensive to use private research groups?

government sources are used, but not exclusively. major money management firms have breathtaking research and analysis departments that do nothing but research particular industries and companies within the industries. they go directly to the sources - or as tw likes to say they go to people who are "where the work gets done". they don't have a political agenda in putting together their conclusions as government workers and pollsters often do, their only goal is accurate info so the decision makers can make solid decisions about what to do with their assets.