'Nifty-fifty' stocks provide right formula for recovery

We believe the economy is recovering, albeit at a pace that is below trend relative to prior recoveries.

This is due principally to slow private-sector lending and recent tax-raising initiatives that will temper capital spending and employment growth. The slack in the economy will remain, inflation will not be an issue despite the massive fiscal deficits, remaining housing excesses will be slow to be removed and the Federal Reserve’s accommodating policy stance will remain in place. When pundits cry about the lack of economic recovery, our response is: “Be careful what you wish for”. Rising interest rates in response to a vigorous recovery will mark the end of the market rally as higher int...