Fed Chairman Ben Bernanke expressed genuine concern about inflationary pressures today. Stocks, which were already weak, fell further on his words. Mr. Bernanke said the economy is entering "a period of transition." That was a nice way of saying growth will slow. This combination of slowing growth and rising inflation is certainly not good news.
Last Friday I was a guest on Kudlow & Co. on CNBC. I advised decreasing equity allocations. Furthermore, I said what you invest in stocks should be tilted toward those issues that hold up best in down markets. These would be non-cyclical stocks and stocks that pay dividends.
Tonight, we will be hosting a Roundtable discussion here at Forbes. Participants will include Liz Ann Sonders of Charles Schwab, Barbara Marcin of the Gabelli Blue Chip Value Fund, Mike Holland of Holland & Co., and Charles Brunie of Brunie Associates. It will be interesting to see if these experienced investors are becoming more cautious. More on that later.
