As stated in our mission, Y&I is dedicated to becoming THE hub for finance and investing insights from the new generation.  We are dedicated to engaging this community of young adults and contributing to the mindshare of knowledge about finance that exists out there. And most of all, we are dedicated to bringing ideas from this generation to the forefront of mainstream discussion and providing them with the attention that any new insight deserves! Y&I is from the new gen, for the new gen.

With those goals in mind, we’d like to share you our vision for Young & Invested and where we hope to be by the time 2011 rolls in. And as in any tightly knit community, we invite your thoughts and feedback on our ideas and especially your suggestions on how we can further engage YOU!

Here’s what you can expect this year:

• NEW: Blogger interviews – Very soon, we’ll be starting featured interviews of prominent financial bloggers to bring you opinions from the best names out there. Keep a look out for that!
• NEW: “Investment Guru” interviews – We’ll be bringing to you interviews from people managing the real dollars. Sharing the tremendous experience and knowledge of these industry leaders will be invaluable.
• MORE: Continued expansion of our contributor base as we search for curious and inquisitive minds looking to put themselves on the map. We love bringing new perspectives such as these to our community. We invite people with a deep interest in finance and investing to contribute, just contact us!
• MORE: You will see more guest posts by invited bloggers/investors/financial experts on topics of their specialty.
• MORE: Continued analysis of financial markets and the economy through insightful and often contrarian articles such as this and this. These have proven to be especially popular, so expect more.

Thank you very much for your support. Cheers to a spectacular 2010!

Your Y&I Team – Dan, Alex & Shishir

From the new generation, for the new generation

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It seems the consensus of bullish investors and authors about 2010 predicts strong emerging markets, glimmering gold, weakening US dollar and weakening bonds, which portrays my outlook for 2010 precisely. Additionally, I’d like to add that in my vision of 2010:

Mr. “Rich” Consumer

Americans will continue to keep finding a way to live above their means. Recently, claims for unemployment and lay-offs have shown to decline to an 18-month low as the economy slowly recovers. This latest employment news has a double-pronged effect. First, a recently reported jump in average weekly working hours means increased income and ability to spend. Secondly, on a more aggregate level, the trend of stabilizing unemployment will improve consumer confidence of job security, a critical factor to assess consumer spending, especially for large-ticket items large cars. Together, these effects will translate into increased consumer spending in 2010.

Mr. “Rich” Consumer without a Job

On the other side of the argument, unemployment will remain relatively high around 9~10% for the entire year due to a prolonged economic recovery. Despite lower layoffs and unemployment claims, which represent incremental increases to unemployment (i.e. the number of unemployed is still increasing but at a slower rate), the overall unemployment rate will slightly decrease from current levels to about 9~10%. Although unemployment may remain high, the stabilization and slight-decrease in the unemployment levels will mildly contribute to increased consumer confidence, but will also generally improve with the economy.

Yes, More Housing

The housing market will stabilize as the S&P/Case-Shiller index has shown uninterrupted growth in price of home sales for the last 6 months; the absolute number of home sales has also increased in the same period. So, homes are being sold more often and for higher values. As shown in the graph below, the Case-Shiller index is barely at its 2003 highs, and down 32.6% from a peak in the second quarter of 2006, so I doubt that any bubble-concerns will arise as the market is still evening out.

Continuing Low Interest Rates from the Fed

Analogous to the notes above, the Fed is obviously aware that economic conditions are showing signs of recovery. The Fed was already noted to exercise some exit-strategies such as ending purchases of Long-Term Treasuries and also stated that debt purchases will significantly decrease into early 2010. But, rates were maintained near 0% during December, 2009. To raise interest rates now, when the level of economic uncertainty is still highly elevated would result in highly-detrimental effects to the economy and the Fed’s reputation – homicide and suicide. Until signs that unemployment levels have definitely peaked and positive economic indicators show long-term trends, rates will be maintained at a low level until 3-rd quarter of 2010 or early 2011.

All of the above point to a pretty good year for the equity markets. Recent analysis I’ve been seeing is consistent with this hypothesis, including increased EPS and operating profits for a majority of companies and all sectors in the S&P500. A recent Wall Street consensus expects forecasts revenue growth in 2010 to be 8%, with improved earnings as well.

I’m a firm believer that history repeats itself, leading me to believe the tradition of the S&P500 index will continue in 2010. Expect a good year for stocks coming up; we’re still about 30% from the market highs of 2007. So, stock market running out of steam? Leave that for 2011.

Disclosure: Long Market

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Young & Invested is THE hub for finance and investing insights from the new generation. Head to our blog for more insights! — http://youngandinvested.com

Just as in 2009, in the new year, we’ve had a flood of predictions on what the major trends, movements and opportunities are going to be, looking forward to 2010. There are so many opinions that you can probably find one that corresponds to your exact views. Only time will tell whether any of these forecasts are worth the (virtual?) paper they are written on. So here are the most common new (false?) mantras for 2010:

Healthcare’s turn in the limelight

After the extended public debate on the best healthcare model to follow in the US, one thing is for certain – more and more Americans are now going to demand proper healthcare, especially now that they actually know they can. The health care bill proved less harsh on the industry then most expected. Investors are now making bets on the healthcare sector growing its way out of the uncertainty of 2009 and possibly even leading the US economy out of the recession.

Emerging markets continue to roar

In 2009, the US economy and stock market significantly underperformed emerging market economies and equities. And the belief is that this trend is going continue, barring a black swan event like the 1997 financial crisis. Global growth is going to continue being driven by Asian economies as countries like China and India grow to form a bigger slice of the world GDP pie. Demand will continue to be spurred by domestic population growth in developing nations and increasing consumerism from their expanding middle classes.

Gold continues to shine

Despite reaching new highs in 2009, the consensus is for gold to continue its ascent as investors and governments slowly lose faith in the value of any one currency and move to holding hard assets, like gold, instead. This sentiment was clearly on display when the Indian government didn’t think the current price of gold was high enough to discourage them from buying 200 tonnes of gold from the IMF. With many investors having elevated inflation expectations due to the amount of liquidity injected in the system, gold is also seen as an effective inflation hedge.

US dollar weakening persists

The US dollar will either continue weakening or will remain at its current level as the effect of the Fed’s eventual interest rate increase is expected to be outweighed by the rising debt burden on the US. The faster growth rates and performance of Asian economies would also hurt the US dollar on relative terms. Though this will mean increased foreign demand for US manufactured exports, it’ll also mean lower purchasing power for US consumers who make up 70% of the US economy.

Bonds slide

The consensus on the outlook for bonds hasn’t been so negative in years. With current rates at all-time lows and the Fed expected to raise interest rates in late 2010, bonds are expected to perform poorly in 2010. Investors who have seen the equity rally of 2009 are no longer going to be satisfied by the measly returns offered by safe fixed-income investments. With the push to go into emerging markets, and invest in commodities to hedge against inflation, bonds will lose out.

Disclosure: Long market.

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Young & Invested is THE hub for finance and investing insights from the new generation. Head to our blog for more insights! — http://youngandinvested.com

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