One-year: 23.9%
Three-year: -4.3%
Five-year: 5.88%
Impediments to investing success: "People chasing the market and forgetting that taxes are real and that everything has to be evaluated on an after-tax basis."
Expert: Lincoln Anderson, Chief Investment Officer
LPL Financial Services, Boston and San Diego
Years in profession: 25
Claim to fame: Anderson, who spent five years as an economist at the Council of Economic Advisers under President Ronald Reagan and eight years as director of economic and sector research at Fidelity Investments before joining LPL Financial in 1999, has been predicting a strong economic recovery since the first quarter of 2001.
Economic outlook: "I'm in the camp where I expect a very strong, sustained recovery. I think 2004 should be a very good year. I'm not certain how long it will last, but I don't see any impediments either."
Interest rate outlook: "I expect rates to move up and the curve to flatten. Both the strong economy and a recovering stock market will drive the increase. But I don't agree that rate hikes will halt the economic turnaround."
Stock market outlook: "It will be up, but I'm not really putting any numbers on it. I believe a strong, sustained stock market seems inevitable. I don't foresee shrinking equity premiums. I don't think it's a new world. After a period of very strong overvaluations, we're coming out the other side."
Recommended asset allocation: "In general, I advise reps to move clients up in terms of equity weightings and down in terms of bond weightings.
Favorite investments: "Large-cap U.S. growth."
Possible Impediments to investing success: "It's the standard list in terms of risks: Another big terrorist attack, high oil prices and financial problems in Japan are all up there. For investors, the biggest risk now is staying with asset classes that have outperformed. That means bonds."
Expert: William Bengen, President
Bengen Financial Services Inc., El Cajon, Calif.
Years in profession: 15
Assets under management: $43 million
Clients: 95
Claim to fame: Bengen has built individual stock portfolios that have consistently beaten the S&P 500 by an average of ten percentage points from 1993 through 2002.
Economic Outlook: "I don't give too much thought to the economy as far as investing goes. It's too big for me to get my arms around."
Interest rate outlook: "Not a clue."
Stock market outlook: "Hopefully up, but it depends on what period of time your talking about. Five to ten years out, I think we'll be beating where we are today. In the short term, I'm not so sure."
Recommended Asset Allocation: "We're all over the place. We have folks with as little as 20% stock allocation and those all the way up to 100%. Depends on their age, risk tolerance, need for cash and a host of other factors."
Favorite investments: Liz Claiborne, Washington Mutual, Pfizer and, "as always," Berkshire Hathaway.
Performance through October 31, 2003:
YTD: 12.91%
One-year: + 7.3%
Three-year: + 0.5%
Five-year: + 10.3%
Possible Impediments to investing success: "My own stupidity, for me. For investors, lack of emotional control."