What’s Next For the Stock and Bond Markets in 2009?

by Stacy Francis, CFP®, CDFA

With investors slowly recovering from the trauma of last fall, numerous clients have scheduled appointments over the next couple of weeks to discuss their investment strategies for the second half of 2009. While specific transactions should always be tailored to your unique, personal circumstances, below are a few general thoughts about investments in the New Year.

First of all, I don’t expect 2009 to be as bad as 2008. Not only was 2008 abnormal almost every sense, but the downside to investing is much smaller now than it was pre-2008. We don’t have as far to fall!

Secondly, most people in the know are predicting inflation, which should push yields on income-generating securities upward from the extreme lows where they are trading right now (if investors don’t expect the yields to beat inflation, the chances they’ll want to buy income-generating securities are small).

Thirdly, I expect that with slightly looser capital markets, the stock markets will slowly start to heal. This doesn’t mean that I expect a major rally. It is rarely wise to expect quick returns on investments, and now is no exception. But if you are in it for the long term, you should be fine.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.