Do all these concerns make us vulnerable to another major market sell-off? Maybe, says Ferguson. If one makes an analogy to the Depression years, he believes we are in late 1931, having avoided that summer's banking crisis. But he wouldn't be surprised to see a downward move in equities as we get more stories about bad debt and more defaults and as sleepy consumer spending continues. So he's expecting both domestic growth and equity prices in 2010 to remain basically flat.

But he's more sanguine about conditions beyond our shores. While he thinks developed markets worldwide may grow around 2% this year, Ferguson is expecting emerging markets-led by China and India-to expand by 7% to 8%. And he believes this rate of growth will be sustainable as these markets reduce their dependence on exports to the U.S. and Europe and rely more on their own internal demand. "You can definitely see the evolution of a two-speed world," says Ferguson.

Ferguson is nervous about the prospects of bad economic news in the United States or from places like Dubai. "I wouldn't want to be holding Treasurys because of the fear of upward rate moves or [want to] have too much exposure to the S&P 500 because I don't see fundamentals driving greater upside," says Ferguson. In fact, he thinks it's possible that a lot of negative news could drive markets significantly lower.

He does, however, like Australia and Canada. He recommends indirect exposure to China through those of her major trading partners that are doing well. He believes Brazil will continue to offer good news as it continues to become a major economy. And he's getting more excited about India, which has many of the advantages the Chinese don't have.

"India doesn't have the most streamlined legal system in the world," he observes, "but the rule of law prevails, and there are private property rights." As India's infrastructure continues to improve, I think the country offers a lot of upside over the next few years. Plus, India has much more domestic demand, he says, and relies less on exports than China. Furthermore, it's an easier market for foreigners to get into.

Broadly, he says, he "can't overemphasize the need for restraint right now. I would be underweight both equities and debt, and up my cash position to 50% of my portfolio, denominated across multiple currencies, including the Canadian and Australian dollars."

Given the roller coaster ride the world has been over the past two years, it would be no surprise if we may indeed be witnessing not just the ascent of money but the ascent of caution.

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