Perspectives on Investing: A Little Respite

Monday, July 30, 2007

A Little Respite

Today's gain of almost 100 points in the Dow Jones Industrial Average provides a least a short respite for investors after two terrible days in the stock market last week. The decline occurred despite the strong economic news released on Friday coupling strong GDP growth with fairly stable inflation and falling interest rates. The 10-year Treasury yield fell below 5% which we believe is an important bell weather for the market.

The bottom line? We'd hang in there with equity positions as this market looks inexpensive to us on an earnings basis - particularly when compared to the 10-year Treasury as we think this should set the stage for further gains to the upside.



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