Wealth Protection Strategies for the Average Investor

Our panel of expert financial advisers tells you what to do with your portfolio in the post-Greenspan era

we always had emerging market opportunities, but there was always a lot of risk associated with [them] because of the political situation in those countries and also the lack of an infrastructure to build on.

Now, you look at emerging markets and they have exceeded us. For example, if you look at India, Pakistan, Indonesia, Malaysia, you look at the industries there [that have been] built with brand new technologies, facilities, and production capacities — all new infrastructure that is far ahead of where we are. So when we look at emerging markets, we have to look at them from a different standpoint: not as very risky anymore but as the new frontier. That’s where we need to be investing, to take advantage of where the future growth is going to take place.

BE: So are you saying that we will see little growth in the U.S. market in 2006?

Williams: Well, surprisingly, in the U.S. market, there will be growth. And I advise my clients to focus on those corporations In the U.S. that have a foreign presence. Even in the auto industry, Ford’s stock is down but Ford sold more cars in China last year than any other foreign automaker.

Dale Bryant: I don’t know what the outlook for 2006 is but I think that, especially for my types of clients [who don’t have] a lot of money, it’s really all about the accumulation, the creation of assets. It is important to be exposed in a big way to the sectors that are going to grow your asset base over the long term [and] through various cycles of the business economy. One of the most important things for 2006 is the direction of interest rates.

BE: Do you think the incoming Federal Reserve Board chairman will advocate the easing of interest rates or do you think he is going to continue to raise interest rates this year?

Hinson: Right now the yield curve is flat. (The yield curve spread is the difference between short-term and long-term interest rates.) The difference between the 10-year [yield] and the two-year is next to nothing when you’re talking basis points. So the real risk is if there is further tightening, [it will create] an inverted yield curve.

Now keep in mind, for recessions since 1950, all of them have been preceded by a flat or inverted yield curve. The question is if there is continued tightening, will that necessarily push this economy into a recession. My personal feeling is that starting out in your term as Fed chairman, the last thing you want to do is to create a recession.

I think that they will wait and see what is going to happen once the tightening from the past and most recent [hike] actually goes to the market. What kind of impact would that have on housing prices? Will housing continue to cool off? So, from where I sit, I think that there are going to be pockets of rallies that occur in the market.

Williams: Initially, there is not going

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