My Investing Notebook :: Learning from the pros; making decisions on my own. ::

How is the economy doing? How is the defic going to impact US’s finances? Hear it from the experts. There is an interview from the experts on the state of the economy from Fidelity, From The Experts: Outlook For 2006. It’s very good.

Here are some excerpts.

Q:After peaking at $71 last September, oil prices retreated in the fourth quarter. What’s your outlook for the energy sector in 2006?Siegel: We won’t return to the good-old days of $40 a barrel. Given the vast energy needs of developing nations like China and India, we’ll see oil prices in the $50 to $60 range for years to come. On the upside, high energy costs may spark opportunities for firms that specialize in conservation. From an investment perspective, the energy sector will continue to perform well in 2006, though certainly not as well as over the past two years. I would recommend energy-related stocks be part—maybe 10%-20%—of every portfolio.

Q: The S&P 500 finished the year with a 3% gain, nearly six percentage points lower than 2004 performance. Has this late-stage bull market run out of steam?
Siegel: In every bull market, there’s a stretch when investors take a rest. During the huge 1990s bull market, ’94 was flat and ’98 was rocky. During the 1980s bull market, we had to endure the ’87 crash. Today, earnings are sound, values are good and I don’t think interest rates will rise dramatically. All this makes stocks look attractive in 2006.

ReferenceFrom The Experts: Outlook For 2006, Fidelity Newsletter (free)