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Best Business Commentary
January 9, 2008
Come back home
“You have to stash your money somewhere,” says Jonathan Clements in The Wall Street Journal, and as counterintuitive as it may sound, you should “stick close to home in 2008.” Emerging-market funds “posted sizzling 37 percent gains in 2007,” but “today’s best values” are in U.S. stock and bond indexes. Emerging-market stocks are overvalued after a five-year tear, and “the dollar seems cheap,” which could hurt foreign stocks and bonds. So “if you have a disciplined bone in your body, you ought to shun today’s international-investing craze.” U.S. large-cap funds and municipal bonds “look tempting,” and even real estate and junk bonds are “getting there.”
Forget the stimulus package
It’s an election year, and the “popular stimulus bandwagon of tax cuts and more spending is rolling,” said John M. Berry in Bloomberg. “Better it had stayed in the garage.” Despite the support of “a few well-known economists,” there really “isn’t a compelling case” for the prescribed medicine: tax cuts and other measures wouldn’t take effect until a fiscal stimulus is “no longer needed.” And our top economic problem, housing, “simply has to run its course.” If politicians want to act, they should “focus on budget discipline” and start planning for the many critical “costly issues” piling up for whomever takes office next year.
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