At a glance
Business Department of Alfred State College, and curriculum coordinator of its financial planning program, recently served on a panel of fellow financial advisers, all of whom gave their prognostications for 2012 to the Wall Street Journal.
Business Department of Alfred State College, and curriculum coordinator of its financial planning program, recently served on a panel of fellow financial advisers, all of whom gave their prognostications for 2012 to the Wall Street Journal.
In addition to Rhoades, the panelists included three other fee-only investment advisers. Written by Daisy Maxey, a special writer for Dow Jones Newswires, and John Leger, a news editor for The Wall Street Journal, the article discusses which financial sectors have the most promise and which have the most peril.
Rhoades opined on the attractiveness to investors of several asset classes, stating: “The stock market, by my calculations, is somewhere around 10-20% undervalued relative to what I would regard as a normal level. And for much of the last 15, 20 years, we've actually been above normal. I think long-term investors need to be in the stock market. It's the best place to be for the long-term investor in terms of tax-adjusted, long-term rates of return….
“The only other asset class that looks attractive at the current time is U.S. real estate. I'm a big fan of direct investment in real estate, for the more sophisticated investors, especially those with experience in it.”
Rhoades also sounded words of caution, stating: “Inflation is very much on my mind all the time. And what's interesting is that the inflation we've seen over the last several years has basically been driven by commodity prices, not by demand. So I would call it bad inflation as opposed to good inflation. And hopefully, demand will continue to come back and we'll be seeing the good type of inflation. And hopefully, the Federal Reserve will react and keep a lid on inflation.”