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Quarterly Investment Commentary

Argent Quarterly Investment Commentary – April 2011

02 May 2011

The only function of economic forecasting is to make astrology look respectable.”

                                                                                              – John Kenneth Galbraith  

Unrest in the Middle East; tsunami in Japan; debt crisis in Europe; threat of a government shutdown in the United States – despite numerous forecasts to the contrary, none of these events prevented the U.S. stock market from rising in the first quarter.    All in all, it was the best first quarter for stocks since 1999.

While we remain bullish on the stock market over the next few years, the surge which began in earnest in the stock market this past August is getting a little long in the tooth.  There are some obvious headwinds.  Oil, priced at under $50 per barrel two years ago, ended the quarter at $106 per barrel.  Most other commodity prices have also seen significant increases.  Higher raw material costs tend to depress corporate profit margins and reduce discretionary spending by consumers.  If energy costs continue to rise, it could be a serious blow.

Argent Quarterly Investment Letter April 2011