Of course there are no guarantees in the equity markets, but I believe stock purchases made today will look good in ten years' time. With a market p/e now in the mid-teens, I think it's realistic to expect returns that are close to the long-term average, say 5%-6% over inflation.

Again, I prefer to stay pretty diversified. That's a personal choice, but with so many good buys out there I don't see the need to overly concentrate in any single stock or market sector. A typical position for me is 1%-2% of retirement assets, FWIW.

I like some of the consumer cyclicals right now. Yes, their earnings are not as steady as a J&J or Coke, but valuations are compelling. Try Harley Davidson. Earnings are forecast to be down about 20% this year, but the shares have been sliced in half and now trade hands at about 12x the reduced estimate. You've got to like a company with customers that will put the company logo on their bodies. (How many folks have a tatoo of Aunt Jemima or the Pillsbury Dough Boy?! Pretty close to zero, I'd imagine).

I also like global infrastructure. Again, earnings have taken a hit, but the shares have really been crushed. For example, Cemex's earnings are forecast to be about 15% off from last year, but the shares are down more than 40% and trading at about 8x the 2008 estimate. In the US alone we have a massive amount of neglected infrastructure that will need to be replaced or improved... from roads and bridges to municipal water and sewer systems. On top of this, there is all kinds of buildout happening across the globe.

Since this is the income investing board, I'll note that both of these stocks also yield north of 3 1/2% today.

It's a good time to crack open One Up On Wall Street, either for a re-read or for the first time. The odds are very high that civilization as we know it will surve this dislocation. The great majority of corporations will at least muddle through the mess we're in, and many will be doing much more business in ten years' time than they are doing today.

Regards,

Duane