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2010 Forecast Preview

As we head into 2010, we are preparing to send out our Investment Strategies newsletter to clients and friends on our mailing list. I wanted to give you a preview of what we are calling our Most Likely Scenario for 2010. For those of you that don’t think you are on the mailing list, please email Melodie Davis and ask her to add you to it – just be sure to give her your physical mailing address and not your email.

You can reach Melodie at davis@bankchampaign.com

In the newsletter, I give you a lot of background analysis as to why I believe that 2010 will be better than I had expected before the analysis – which is why I thought we should end the year with a silly but upbeat 70’s pop hit.

Happy New Year!

2010 Most Likely Scenario

>We begin to see a gradual increase in interest rate and ending of quantitative easing by the Fed based upon the beginnings of the economic recovery

>Most investments will have a good year – stocks, corporate & high yield debt, and commodities – but returns are much less than 2009

>Yields increase across the curve as expectations for economic recovery grow, so government debt will likely not have a good year

>The dollar rallies initially as yields increase, but resumes its downtrend as our debt and deficit increases continue

>Housing will continue to slowly improve, but overhang from defaulted mortgages will be added to supply, keeping prices down and supply greater than demand

>We will have another jobless recovery, with a return to below normal economic growth and above average unemployment