Striking a you-ain't-seen nothin'-yet tone, the managing director of one of the nation's largest mutual fund companies told local investors Wednesday to get into the market this fall or risk missing another major stock run.
Robert Goodman, managing director of Boston-based Putnam Investments, said sound U.S. monetary and fiscal policy, combined with a flood of cash waiting out the Year 2000 computer bug, could make next year a banner one for stocks.
The next four months will feature market volatility, but watch out for the first quarter of next year, Goodman said. About half of the $200 billion parked in money market mutual funds will likely flow into stocks after the much-hyped Year 2000 computer problem finally passes, Goodman predicted.
"Y2K will be the biggest non-event in 2,000 years and what we're going to be left with is these (market) fundamentals," he said. "Everyone will try to go through the same door at the same time. The idea for an investor is to be early, be on the other side of the door."
Several other factors also point to a big year ahead for equities including: Continued low inflation; recovery of Asian economies; and the probability of a U.S. capital gains tax cut, Goodman said.
The next four to six years could well present tremendous opportunity for creating wealth through long-term investing, he said. A bear market may ultimately hit years down the road if government leaders attempt to reform tax laws and the economic system in the name of fairness, social justice and spreading the wealth, he predicted.
Putnam Investments manages more than $320 billion in a family of more than 100 mutual funds. Goodman has more than 29 years of experience in the investment industry and is a frequent guest on national television talk shows.
He was invited to Buffalo by McDonald Investments, the brokerage arm of KeyCorp. McDonald Investments manages accounts for more than 143,000 households in Western New York, with combined assets of about $2.5 billion.
Goodman said U.S. fiscal policy, with budget surpluses projected in coming years, will begin having an impact on financial markets. The U.S. Treasury plans to begin buying back debt, which should push down long term bond yields, he said.
"Ultimately, when these rates come down, they will come down hard," he told a lunch time audience at Sheraton Four Points Wednesday.
The money manager advised fixed income investors to jump on current bond yields of about 6 percent and to buy more if yields nudge higher. He believes long term bond yields will ultimately sink near 4 percent.
Both stock and bond markets will be volatile in the next four months as investors worry about inflation and the Y2K, he said. The trick for investors is to take advantage of the swings, such as buying stocks when prices dip, he said.
"In the next four months, you are going to be given a lot of reasons not to participate. You are going to become frightened. You are going to become scared," Goodman said, but encouraged investors not to sit out.
"If you do that, you are going to miss out on the most incredible opportunity in a long time," he said.
Architect moves to Clarence
Herendeen Architect PC has relocated to 8450 Main St., Clarence. The firm recently completed the design and construction supervision of the Town of Clarence Engineering and Building Department on Goodrich Road. It also has projects in Orleans, Cattaraugus and Chautauqua counties.