Strategist Dont Let Recession Fear Rule
"Road to Recession" is the stark headline on the cover.
Whether or not the
"Unless something has changed in the individual situation, there is no reason to make changes to your portfolio," said Thoma, who was in
Thoma, who is based in the Edward Jones headquarters in
He graduated summa cum laude from Southern Illinois University at Edwardsville in 1998, earning a bachelor's degree in business administration with an emphasis on finance and economics. Then he earned a master's degree in economics and finance from Southern Illinois University in 2000, and also served as an instructor there in corporate finance and banking/risk management. He earned his Chartered Financial Analyst designation in 2003 and is a member of the CFA Institute.
He began his career with Edward Jones, one of the largest securities firms in the
"I think the economy has weakened," said Thoma in an interview with the Business Journal, "but I think a lot of positives are going on that aren't really talked about a lot."
One example of a positive, he said, is the Federal Reserve cuts in interest rates: twice in January and predicted by some analysts to happen again soon, possibly taking rates as low as 2 percent. Thoma said that won't cure the problems in the housing industry right now but it does "give confidence to business and individuals that the Fed is doing what it can."
By the way, he said, housing is only 6 percent of the national economy and it is expected to get better in about one year. He said it takes longer for the housing market to change because it is not volatile like stocks: Home values don't change radically overnight.
Another positive right now is that it is an election year, which means there are many interested parties that don't want to see a recession, he said.
Other than the financial industry, the "balance sheets of corporate
Thoma said research indicates that the average recession lasts 10 months — but that it takes six to eight months to determine that it is (or was), in fact, a recession.
"By the time you know you're in one, it's basically over," he said.
"Don't try to time the market," he said.
His experience studying health care industry investments has made Thoma well aware of the strengths of the
Right now, Edward Jones rates Medtronic a "buy," said Thoma. "I think it is a company that is undervalued," he said.
Stryker had also been a "buy" but was recently downgraded to a "hold." He said that was more of an adjustment in their view of Stryker, as opposed to a reaction to any problems the company may have. He added that Stryker is still a "fantastic" firm. Both companies are well diversified within the medical devices industry, which gives them strength, he said.
As to the stock market in general, Thoma points to a possible clue that now is a good time to buy. He cited three recent events in
After the 1987 crash came "one of the best bull markets in history," he said, and after the 2002-2003 sell-off, markets doubled in value.
So now there is apparently a sell-off.
"We would argue that's a very positive sign for the market," said Thoma.