My colleagues and I recently completed our Summer 2010 Quarterly Report, in which we review the second quarter, offer our outlook for the economy and market, and discuss three of the stocks we are currently buying (Becton, Dickinson (BDX), Diageo (DEO), and General Electric (GE)).
A few highlights from the report:
- While challenging, market corrections such as the one experienced during the second quarter are normal during an economic recovery.
- The market dropped in the quarter due primarily to concerns about Greek debt and the risk of spillover into other parts of Europe and the world, but we do not expect these issues to derail the global economic recovery.
- We expect growth to moderate in the coming quarters, as is typical at this point in a recovery, but we believe the economy is not headed for a double dip recession. Many fundamental measures of global economic growth remain positive and encouraging.
- Developing countries will be an important growth engine that propels the global recovery.
- Robust corporate earnings reports in the coming weeks should provide support for a rise from currently low market valuations.
- We see the best opportunities in large, well-capitalized, multinational corporations with a strong presence both in the United States and abroad, particularly in emerging markets, and healthy cash flows that support rising dividend payments to shareholders.
- We forecast continued volatility but remain optimistic that the economy will continue to recover and markets will rise.
For more details of our views and outlook, you can read the Quarterly Report in its entirety.
As always, feel free to contact us or visit our website if you have any questions or comments.
Jordan Smyth and the Edgemoor Investment Advisors Team
