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Continued: Expert advice on how average investors can navigate strengthening U.S. and global economy

  • Article by: PATRICK KENNEDY , Star Tribune
  • Last update: December 28, 2013 - 7:11 PM

 

Q: What would be the pace of the tapering?

 

Russell Swansen: Everybody looks at whoever the Fed chairman is as though they set policy themselves, and they don’t. It’s voted on by the committee, you have a lot of turnover on the committee and you have ­probably a greater mix of [inflation] hawks coming on. So the perception may be that there’s less agreement on the committee than there has been in the past. I think there’s a good question of whether [and] how effective Janet Yellen will be at communicating.

 

John DeClue: I’m going to take the brighter side of that, you asked about Yellen. … She is number one, the best predictor of economic events of anyone [on the committee]. We may not get as much communication as we would want but it will probably be more crisp.

 

Erica Bergsland: I don’t think we’re in a normal environment. I think what you’re talking about with the taper is removing a distortion, not necessarily tightening … so I think the economy can absorb a taper … and I think the Fed will be very ­cautious in how they do it.

 

Elizabeth Lilly, portfolio manager, Westwood Teton Mighty Mites Fund and Gabelli Small Cap Fund: The tapering is not increasing interest rates, it’s just pulling liquidity out of the system. That’s a huge ­difference.

 

Doug Ramsey, chief investment ­officer, The Leuthold Group: Housing was an undisputed leader in the last cycle. Our view is that housing was, for a typical American, a far more pervasive bubble. Not as extreme maybe as the tech bubble, but it was a more pervasive bubble. And what we’re seeing now is sort of a typical post-bubble aftermath.

 

Q: In 2013, investors in the markets had a lot thrown at them: the fiscal cliff, sequesters, debt-ceiling debates, the government shutdown, and I think there’s more looming at the start of the year. Have investors learned to navigate these types of disruptions?

 

Jim Paulsen: A lot of what happened last year just has to do with the change in confidence that took place. Confidence went from postwar lows until about a year ago. Now it’s at five-year highs. And that move to me was about finally giving up the “Armageddon ghost.’’ We’re not giving up the idea we have problems and challenges … but we no longer believe that every new thing is going to be the end the world.

 

Biff Robillard, president and co-founder of Bannerstone Capital Management: We’ve been talking as if [the world] was going to end for years in financial circles, and I think it can be a powerful condition when investors slowly realize they made it. They got through the hard part, and I think that’s going to be a very important thing.

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  • In this Monday, Dec. 16, 2013 photo, specialist William Geier, left, works on the floor of the New York Stock Exchange. Investors took to the sidelines Tuesday, Dec. 17, 2013, a day ahead of a key policy decision from the U.S. Federal Reserve that may see the central bank reduce its massive monetary stimulus

  • Erica Bergsland, Director of Research and Trading, Advantus Capital Management

  • Russ Swansen, Chief Investment Officer, Thrivent Financial for Lutherans

  • John De Clue, Chief Investment Officer, The Private Client Reserve, U.S.Bancorp

  • Biff Robillard, Investment Advisor, hedge fund manager and owner, Bannerstone Capital Management and Robillard Capital Management. 

  • Carol Schleif, Regional Chief Investment Officer, Asset Management, Abbot Downing, Wells Fargo.  

  • Doug Ramsey, Chief Investment Officer, The Leuthold Group

  • Elizabeth Lilly, Portfolio Manager, Gabelli Woodland Small Cap Value Fund and GAMCO Westwood Mighty Mites Fund

  • James Paulsen, Chief Investment Strategist, Wells Capital Management

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