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From the December 2006 issue of Investment Advisor • Subscribe!
Behind the Numbers, with Mark Keller
"We think the data show that stocks' long-term performance is superior to that of the other asset classes, hence, we tend to weigh stocks more heavily," says Mark Keller, the chief investment officer of A.G. Edwards. However, Keller says even 60% allocated to stocks is a cautious position. "We usually move the model in five point increments, so at 60%, we're one notch below our benchmark of 65% stocks." Keller believes he has a healthy allocation, but is not overly enthusiastic due to a recession in the housing sector that may spill over into the rest of the economy. An inverted yield curve is another one of his concerns. Keller favors domestic stocks at the moment. "We are not as bearish on the dollar," he says, "and we think the valuation looks a lot more interesting here than overseas." As for January 2007 predictions, he forecasts a soft landing with earnings growth on the slow side.