Friday Folio from Redhawk Wealth Advisors

Friday Folio

Below is a regular Friday email that we publish for those who are tracking our investment portfolios and want to know the "Signals" that are influencing investment decisions. Equity Market Outlook from Bob Doll of Blackrock “Three months ago, stocks were pricing in about a 50% chance of a US recession and it looked increasingly likely that the European debt crisis would escalate into an Armageddon scenario. Today, while we would hardly say that the United States is poised to enter boom conditions or that the eurozone crisis has been solved, these risks have clearly receded, which has helped stocks to regain some footing. Our base case outlook is that these improving trends will continue along an uneven path, suggesting that stocks are poised for additional outperformance in the months ahead. As was the case for the latter half of 2011, the key wildcard for global stocks remains the extent to which progress can be made in terms of resolving the European debt crisis. Over the closing months of last year, there did appear to be a change in tone among Europe's policymakers and elected officials as they moved from a sort of complacency into taking more forceful action. The difficult decisions that need to be made combined with a contentious political backdrop in Europe do mean that progress will be slow and uneven, but we do expect it will continue. Over the near term, we expect volatility levels will remain high given that we will likely see a "two steps forward, one step back" theme in both the eurozone debt crisis and in US economic growth. Nevertheless, we also expect that conditions should improve enough that investors will be willing to move back into risk assets. That trend, combined with attractive valuations and still-decent earnings growth, should set the stage for equity market outperformance. Equity Views Our main investing theme as we enter 2012 is a focus on free cash flow generation, particularly those companies that have the cash flow needed to increase their dividends. These types of companies can be found across capitalizations, styles and sectors. From a geographic perspective, we continue to believe that the United States is better positioned than other developed markets. Regarding emerging markets, we may see a turnaround at some point in 2012, but we believe it is too early to make that call.” For a personal evaluation of your porfolio visit my investment website:  You can plug in you own parameters for investing and get daily updates.