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Sunday, March 28, 2010
Monday, March 1, 2010
How much should I save?
How much should I save?
Julia Labaton has spent 10 years building her own business, a PR agency serving the beauty industry, and it has prospered through two recessions.
But like many entrepreneurs, she's plowed earnings back into the agency at the cost of her retirement. She has only $36,500 saved for that, and just $4,000 in cash earmarked for emergencies.
"I have no idea where I should be at this age in terms of savings," she confesses.
What the planner says
As she fears, Julia is behind. To retire at 65, as she plans, and still maintain her lifestyle, she'll need a nest egg of $1.7 million, says New York planner Laura Mattia.
Fortunately, "Julia's young enough to catch up." But to do so, she'll need to put away a daunting $1,500 a month, more than double the $625 she's saving now.
She can also improve her investing strategy - she's currently in high-cost funds that have underperformed the market, and she's far too stock-heavy. While she's increasing her savings, she ought to be building a bigger cash cushion too - ideally a year's worth of expenses since she's single and self-employed.
What she should do
RAMP UP RETIREMENT. For now, Julia thinks she can stash $500 more a month, of which $300 should go toward retirement. (The rest can go to her emergency fund.) Longer term, she'll look to increase business revenue to get to $1,500 a month. She's allowed to set aside only $5,000 a year in her traditional IRA. But as a business owner, she can open a Simple IRA, and save up to $11,500 in 2010.
ALLOCATE FOR STABILITY. With 95% of her portfolio in stocks, Julia is taking on too much risk. A 38-year-old might normally be advised to have a 75% stock/25% bond mix. But with the added risk of being self-employed, she should be more like 60%/40%, says Mattia.
SWAP FUNDS. Mattia suggests Julia trade high-cost underperformers for lower-cost index funds and ETFs. Among the recommendations: moving 7% of her IRA to midcap U.S. stocks via MidCap SPDR, 7% to small-caps via the iShares Russell 2000 ETF, and 9% to an international ETF like iShares MSCI EAFE.
Julia Labaton has spent 10 years building her own business, a PR agency serving the beauty industry, and it has prospered through two recessions.
But like many entrepreneurs, she's plowed earnings back into the agency at the cost of her retirement. She has only $36,500 saved for that, and just $4,000 in cash earmarked for emergencies.
"I have no idea where I should be at this age in terms of savings," she confesses.
What the planner says
As she fears, Julia is behind. To retire at 65, as she plans, and still maintain her lifestyle, she'll need a nest egg of $1.7 million, says New York planner Laura Mattia.
Fortunately, "Julia's young enough to catch up." But to do so, she'll need to put away a daunting $1,500 a month, more than double the $625 she's saving now.
She can also improve her investing strategy - she's currently in high-cost funds that have underperformed the market, and she's far too stock-heavy. While she's increasing her savings, she ought to be building a bigger cash cushion too - ideally a year's worth of expenses since she's single and self-employed.
What she should do
RAMP UP RETIREMENT. For now, Julia thinks she can stash $500 more a month, of which $300 should go toward retirement. (The rest can go to her emergency fund.) Longer term, she'll look to increase business revenue to get to $1,500 a month. She's allowed to set aside only $5,000 a year in her traditional IRA. But as a business owner, she can open a Simple IRA, and save up to $11,500 in 2010.
ALLOCATE FOR STABILITY. With 95% of her portfolio in stocks, Julia is taking on too much risk. A 38-year-old might normally be advised to have a 75% stock/25% bond mix. But with the added risk of being self-employed, she should be more like 60%/40%, says Mattia.
SWAP FUNDS. Mattia suggests Julia trade high-cost underperformers for lower-cost index funds and ETFs. Among the recommendations: moving 7% of her IRA to midcap U.S. stocks via MidCap SPDR, 7% to small-caps via the iShares Russell 2000 ETF, and 9% to an international ETF like iShares MSCI EAFE.
--------------------------------------------------------------
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3 ways to find value in a pricey market
3 ways to find value in a pricey market
A year ago, when all sorts of investments -- stocks, bonds, commodities -- were being tossed on the scrap heap, dyed-in-the-wool bargain hunters who had the courage to sift through the market's ruins were richly rewarded.
U.S. blue-chip stocks, for instance, rebounded 59% from March to January. Bonds issued by companies with poor credit ratings rocketed nearly 60%. And shares of fast-growing firms based in emerging economies, like China and India, nearly doubled.
"You could throw darts and do well," says Forester Value manager Tom Forester, whose stock mutual fund was the only one to have made money in 2008, and has gained 8% a year since the financial crisis began.
While the across-the-board rebound served as vindication for those who took Warren Buffett's advice to be "greedy when others were fearful," it poses a major challenge today.
If a value investor is someone who bets on stocks that his peers are ignoring, can you still be one after so many have piggybacked on your bets? And with almost everything well above its March 2009 low, is there such a thing as an undervalued asset anymore?
Obviously the pickings are a lot slimmer for buy-low devotees. But it's not impossible to find attractive opportunities. "There is still value out there," says Forester. "It's just harder to come by."
The trick is to know where to look. Start in the most obvious place: among those investments that didn't fully participate in last year's rally -- and are therefore cheap by anyone's standards. Granted, it isn't a terribly long list, as the numbers at left indicate.
Another strategy is to look for stocks that have shot up alongside the broad market -- but whose fundamentals have improved even more. As a result, these shares can be regarded as real bargains in both relative and absolute terms.
Finally, at a time when the market is turning greedy for growth, the ultimate contrarian move may be to shift your portfolio into a defensive, income-minded mode. But it's imperative you do so in a cheap way.
Below, find out how to execute these three strategies -- either through individual stocks or exchange-traded funds that allow you to spread your bets across various asset classes or particular sectors. Playing the bargain hunter's game in a market where few deals jump out isn't easy, but it's the only prudent way to invest.
Strategy No. 1: Focus on the laggards that remain undervalued.
Though most equities gained ground last year, not every stock was a Ferrari whizzing by in the fast lane. In fact, one group -- health care -- lagged, largely because of fears about potential government policy changes.
The bargain: Big pharma. Blue-chip drugmakers were the wallflowers of last year's recovery party. While the S&P 500 soared 24% in 2009, Johnson & Johnson and Pfizer gained less than 8%. Eli Lilly actually fell.
A big force that held this group back was the uncertainty swirling around health-care reform. But with fears of any profit-threatening reforms abating after the loss of the Democratic super-majority in the U.S. Senate, it's time to give this sector another look. When you do, you'll find compelling values rare in stocks with solid balance sheets.
Indeed, because of their high levels of profitability combined with low debt, drug stocks have typically traded at a slight premium to the S&P. But due to reform concerns, these shares are trading at a 40% discount to the market.
In other words, investors are paying considerably less per dollar of health-care earnings than for other corporate profits -- a discrepancy that won't last forever. Johnson & Johnson, for example, trades at a P/E of 13, compared with around 19 for the S&P, says Bill Nygren, co-manager of the Oakmark Fund. What's more, JNJ's 3.1% dividend is more than the yield on five-year Treasuries.
For ETF investors: Johnson & Johnson, Pfizer, and Merck are the three largest holdings of Health Care Select SPDR, accounting for more than 30% of its assets.
Strategy No. 2: Go with stocks that have risen - but are still cheap.
Looking for a bargain means seeking stocks that are undervalued. But stocks don't have to be beaten down to be a good deal.
The bargain: Tech stocks. Yes, tech was among the market's big winners in the recent rebound. But because earnings for information technology companies actually grew during the financial crisis, tech has seen its price/earnings ratio fall since the credit crunch began in 2007, while the S&P 500's P/E has risen.
Imagine how this group will perform once sales, which fell for a brief period in 2009, improve as the economy heals? Forrester Research forecasts that global spending on IT products and services should jump 8.1% this year to $1.6 trillion.
James Barrow, who runs a portion of the value-minded Vanguard Windsor II fund, says two of the cheapest -- and most attractive -- stocks in the group are IBM and Hewlett-Packard. Both firms trade at just 11 times projected earnings, though their shares soared 56% and 42%, respectively, last year. Both managed to boost or maintain profit margins during the downturn by aggressively slashing costs.
And the companies have ample cash on their balance sheets -- HP, for instance, sits on more than $10 billion -- to invest in future growth.
For ETF investors: If you want exposure not just to IBM and HP but also to a variety of other tech companies, check out Vanguard Information Technology, an exchange-traded fund that counts HP and Big Blue among its top six holdings.
Strategy No. 3: Seek income -- but don't pay exorbitant prices for it.
At a time when many investors are trying to jump on last year's bandwagon, playing it safe may make sense. But bonds -- the traditional conservative refuge -- are in fact risky now. Here's a better way to get income.
The bargain: Dividend-paying stocks. After last year's rally sent domestic and foreign bonds soaring, you can't say that fixed-income investments are cheap anymore. But with an average P/E of just 15, dividend-paying stocks are -- relative to the broad market, to their historical average, and to bonds.
True, stocks are on average yielding just 2%, but some sectors are paying out considerably more. Shares of large telecommunications companies, for instance, are yielding more than 5%.
Dan Chamby, associate portfolio manager for the BlackRock Global Allocation fund, says the Treasury-beating payouts of dividend stocks, particularly in the telecom sector, make them "fixed-income surrogates." Chamby recommends Verizon (yield 6.6%) and AT&T (6.8%). He's not alone. Pimco bond chief Bill Gross has also been beating the drum for dividend payers.
But aren't stocks inherently more volatile than bonds? Absolutely. Yet bonds aren't as safe as you might think. Interest rates are at record lows; when the trend reverses, bond prices -- which move in the opposite direction of rates -- could get pummeled.
For ETF investors: iShares S&P Global Telecommunications sports a 4.3% dividend yield.
A year ago, when all sorts of investments -- stocks, bonds, commodities -- were being tossed on the scrap heap, dyed-in-the-wool bargain hunters who had the courage to sift through the market's ruins were richly rewarded.
U.S. blue-chip stocks, for instance, rebounded 59% from March to January. Bonds issued by companies with poor credit ratings rocketed nearly 60%. And shares of fast-growing firms based in emerging economies, like China and India, nearly doubled.
"You could throw darts and do well," says Forester Value manager Tom Forester, whose stock mutual fund was the only one to have made money in 2008, and has gained 8% a year since the financial crisis began.
While the across-the-board rebound served as vindication for those who took Warren Buffett's advice to be "greedy when others were fearful," it poses a major challenge today.
If a value investor is someone who bets on stocks that his peers are ignoring, can you still be one after so many have piggybacked on your bets? And with almost everything well above its March 2009 low, is there such a thing as an undervalued asset anymore?
Obviously the pickings are a lot slimmer for buy-low devotees. But it's not impossible to find attractive opportunities. "There is still value out there," says Forester. "It's just harder to come by."
The trick is to know where to look. Start in the most obvious place: among those investments that didn't fully participate in last year's rally -- and are therefore cheap by anyone's standards. Granted, it isn't a terribly long list, as the numbers at left indicate.
Another strategy is to look for stocks that have shot up alongside the broad market -- but whose fundamentals have improved even more. As a result, these shares can be regarded as real bargains in both relative and absolute terms.
Finally, at a time when the market is turning greedy for growth, the ultimate contrarian move may be to shift your portfolio into a defensive, income-minded mode. But it's imperative you do so in a cheap way.
Below, find out how to execute these three strategies -- either through individual stocks or exchange-traded funds that allow you to spread your bets across various asset classes or particular sectors. Playing the bargain hunter's game in a market where few deals jump out isn't easy, but it's the only prudent way to invest.
Strategy No. 1: Focus on the laggards that remain undervalued.
Though most equities gained ground last year, not every stock was a Ferrari whizzing by in the fast lane. In fact, one group -- health care -- lagged, largely because of fears about potential government policy changes.
The bargain: Big pharma. Blue-chip drugmakers were the wallflowers of last year's recovery party. While the S&P 500 soared 24% in 2009, Johnson & Johnson and Pfizer gained less than 8%. Eli Lilly actually fell.
A big force that held this group back was the uncertainty swirling around health-care reform. But with fears of any profit-threatening reforms abating after the loss of the Democratic super-majority in the U.S. Senate, it's time to give this sector another look. When you do, you'll find compelling values rare in stocks with solid balance sheets.
Indeed, because of their high levels of profitability combined with low debt, drug stocks have typically traded at a slight premium to the S&P. But due to reform concerns, these shares are trading at a 40% discount to the market.
In other words, investors are paying considerably less per dollar of health-care earnings than for other corporate profits -- a discrepancy that won't last forever. Johnson & Johnson, for example, trades at a P/E of 13, compared with around 19 for the S&P, says Bill Nygren, co-manager of the Oakmark Fund. What's more, JNJ's 3.1% dividend is more than the yield on five-year Treasuries.
For ETF investors: Johnson & Johnson, Pfizer, and Merck are the three largest holdings of Health Care Select SPDR, accounting for more than 30% of its assets.
Strategy No. 2: Go with stocks that have risen - but are still cheap.
Looking for a bargain means seeking stocks that are undervalued. But stocks don't have to be beaten down to be a good deal.
The bargain: Tech stocks. Yes, tech was among the market's big winners in the recent rebound. But because earnings for information technology companies actually grew during the financial crisis, tech has seen its price/earnings ratio fall since the credit crunch began in 2007, while the S&P 500's P/E has risen.
Imagine how this group will perform once sales, which fell for a brief period in 2009, improve as the economy heals? Forrester Research forecasts that global spending on IT products and services should jump 8.1% this year to $1.6 trillion.
James Barrow, who runs a portion of the value-minded Vanguard Windsor II fund, says two of the cheapest -- and most attractive -- stocks in the group are IBM and Hewlett-Packard. Both firms trade at just 11 times projected earnings, though their shares soared 56% and 42%, respectively, last year. Both managed to boost or maintain profit margins during the downturn by aggressively slashing costs.
And the companies have ample cash on their balance sheets -- HP, for instance, sits on more than $10 billion -- to invest in future growth.
For ETF investors: If you want exposure not just to IBM and HP but also to a variety of other tech companies, check out Vanguard Information Technology, an exchange-traded fund that counts HP and Big Blue among its top six holdings.
Strategy No. 3: Seek income -- but don't pay exorbitant prices for it.
At a time when many investors are trying to jump on last year's bandwagon, playing it safe may make sense. But bonds -- the traditional conservative refuge -- are in fact risky now. Here's a better way to get income.
The bargain: Dividend-paying stocks. After last year's rally sent domestic and foreign bonds soaring, you can't say that fixed-income investments are cheap anymore. But with an average P/E of just 15, dividend-paying stocks are -- relative to the broad market, to their historical average, and to bonds.
True, stocks are on average yielding just 2%, but some sectors are paying out considerably more. Shares of large telecommunications companies, for instance, are yielding more than 5%.
Dan Chamby, associate portfolio manager for the BlackRock Global Allocation fund, says the Treasury-beating payouts of dividend stocks, particularly in the telecom sector, make them "fixed-income surrogates." Chamby recommends Verizon (yield 6.6%) and AT&T (6.8%). He's not alone. Pimco bond chief Bill Gross has also been beating the drum for dividend payers.
But aren't stocks inherently more volatile than bonds? Absolutely. Yet bonds aren't as safe as you might think. Interest rates are at record lows; when the trend reverses, bond prices -- which move in the opposite direction of rates -- could get pummeled.
For ETF investors: iShares S&P Global Telecommunications sports a 4.3% dividend yield.
--------------------------------------------------------------
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The price you pay for frothy assets.
The price you pay for frothy assets
As the 10th anniversary of the bursting of the tech bubble is upon us, you've probably read a slew of stories about what an awful decade this has been for stocks.
But what drives me nuts is that despite all this press, there's still very little discussion about why stocks have stunk since the market crashed in March 2000.
The reason is simple: A decade ago most equities were insanely expensive. Even shares of boring blue-chip companies were trading at frothy price/earnings ratios of 40 or 50 -- a fact that sometimes is forgotten because so many of our memories of the go-go '90s center on profitless outfits like Pets.com.
Those frothy valuations turned out to be an enormous headwind to equity returns because they reflected sky-high expectations that only a ridiculous rate of earnings growth could have met.
A perfect example is Wal-Mart. In 2000 the world's biggest retailer traded at a P/E of 42.5, which is steep for such a mature firm. That year the company earned $1.25 a share. Multiply that by the P/E, and you get a share price of around $53.
Over the past decade Wal-Mart's earnings have nearly tripled, to $3.41 a share, a solid annual growth rate of 12% (that's just a tad lower than the company's 14% growth rate in the mid- to late '90s).
But because profit expectations were set so high, investors wound up punishing Wal-Mart by cutting its P/E at about the same pace that the firm's earnings expanded. As a result, Wal-Mart's stock price has pretty much gone nowhere even though the company has delivered solid results.
This is the tyranny of valuation in its simplest form. Nothing affects your future returns more than the price you pay for your investments.
Forgetting the past
I want to drive this point home because investors appear to be making the same mistake today -- only with a different investment.
Consider this: In 1999, Americans shoveled nearly $200 billion into equity funds when stocks traded at 40 times earnings. At the same time, they yanked $4 billion out of bond funds when 10-year Treasuries were yielding around 6%.
Today it's just the opposite. Investors pulled about $4 billion out of stock funds over the past year even as P/Es fell to 20 (that's not cheap on an absolute basis, but it's a better deal relative to a decade ago). Meanwhile, they poured around $300 billion into bond funds after demand for Treasuries had grown so much that yields fell to less than 4%.
Now, I can't say whether the next decade will be as bad for stocks -- or as good for bonds -- as the past 10 years were. But I do know the tradeoff today between equities and fixed-income investments is very different than it was in March 2000.
For instance, because investors aren't paying record prices for stocks anymore, profit expectations won't be nearly as high as they were a decade ago. However, because you're paying frothier prices for government bonds, the bar will be set higher for Uncle Sam's financial performance. So ask yourself how confident you are in the government's balance sheet.
As the 10th anniversary of the bursting of the tech bubble is upon us, you've probably read a slew of stories about what an awful decade this has been for stocks.
But what drives me nuts is that despite all this press, there's still very little discussion about why stocks have stunk since the market crashed in March 2000.
The reason is simple: A decade ago most equities were insanely expensive. Even shares of boring blue-chip companies were trading at frothy price/earnings ratios of 40 or 50 -- a fact that sometimes is forgotten because so many of our memories of the go-go '90s center on profitless outfits like Pets.com.
Those frothy valuations turned out to be an enormous headwind to equity returns because they reflected sky-high expectations that only a ridiculous rate of earnings growth could have met.
A perfect example is Wal-Mart. In 2000 the world's biggest retailer traded at a P/E of 42.5, which is steep for such a mature firm. That year the company earned $1.25 a share. Multiply that by the P/E, and you get a share price of around $53.
Over the past decade Wal-Mart's earnings have nearly tripled, to $3.41 a share, a solid annual growth rate of 12% (that's just a tad lower than the company's 14% growth rate in the mid- to late '90s).
But because profit expectations were set so high, investors wound up punishing Wal-Mart by cutting its P/E at about the same pace that the firm's earnings expanded. As a result, Wal-Mart's stock price has pretty much gone nowhere even though the company has delivered solid results.
This is the tyranny of valuation in its simplest form. Nothing affects your future returns more than the price you pay for your investments.
Forgetting the past
I want to drive this point home because investors appear to be making the same mistake today -- only with a different investment.
Consider this: In 1999, Americans shoveled nearly $200 billion into equity funds when stocks traded at 40 times earnings. At the same time, they yanked $4 billion out of bond funds when 10-year Treasuries were yielding around 6%.
Today it's just the opposite. Investors pulled about $4 billion out of stock funds over the past year even as P/Es fell to 20 (that's not cheap on an absolute basis, but it's a better deal relative to a decade ago). Meanwhile, they poured around $300 billion into bond funds after demand for Treasuries had grown so much that yields fell to less than 4%.
Now, I can't say whether the next decade will be as bad for stocks -- or as good for bonds -- as the past 10 years were. But I do know the tradeoff today between equities and fixed-income investments is very different than it was in March 2000.
For instance, because investors aren't paying record prices for stocks anymore, profit expectations won't be nearly as high as they were a decade ago. However, because you're paying frothier prices for government bonds, the bar will be set higher for Uncle Sam's financial performance. So ask yourself how confident you are in the government's balance sheet.
--------------------------------------------------------------
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Economy grew 5.9% in fourth quarter
Economy grew 5.9% in fourth quarter
The U.S. economy grew at a slightly faster pace than originally thought during the last three months of 2009, according to a government report Friday.
The nation's gross domestic product, the broadest measure of the nation's economic activity, grew at an annual rate of 5.9% in the quarter, the Commerce Department reported. Economists surveyed by Briefing.com had forecast that the revision would show the same 5.7% growth that was originally reported a month ago.
The report is another sign that the U.S. economy has pulled out of the deepest downturn since the Great Depression. The solid growth, the best improvement for the U.S. economy in more than six years, follows a 2.2% annualized increase in the third quarter. Most economists now agree that the recession probably ended at some point last summer.
Still, the strong end of 2009 wasn't enough to make up for the even larger declines in the first half of the year. For the full year, GDP fell 2.4%, the biggest decline in the annual reading since 1946.
The recovery is widely perceived as fragile. Federal Reserve Chairman Ben Bernanke testified to Congress this week that the central bank will need to keep interest rates low in order to support the economy.
The recovery is even less apparent to the typical American. Job losses have continued in all but one month and most economists believe unemployment will stay close to 10% for much of the year.
Credit remains tight for small businesses and consumers and the recovery in housing prices is uneven at best. The most recent survey of 5,000 American consumers by the Conference Board found the greatest level of worry about the current state of the economy in 27 years.
"The fourth quarter GDP revision tastes great, but is less filling," said Robert Dye, senior economist of PNC Financial Services Group. "We need the meat and potatoes of private-sector job creation in order to sustain this recovery."
This GDP reading showed consumers still very much on the sidelines, as spending by individuals increased at a far more modest 1.7% annual rate in the quarter. Instead, it was businesses and the federal government that led the way on growth.
More than half the growth in the quarter was due to the fact that businesses were no longer slashing inventories the way they did in the first three quarters of the year. Spending on equipment and software, often seen as a proxy for business investment, grew at an 18.2% rate in the period.
Nondefense spending by the federal government grew at an 8.3% rate. But budget-strapped state and local governments cut spending at a 2% rate, while defense spending fell 3.5%, leading to a decline in overall government spending.
A 22% rise in exports also was a major contributor to growth.
The lift from the rebuilding of inventories and the government stimulus package passed last year is expected to wane later this year, meaning growth will likely slow to a more modest rate. Economists surveyed by the National Association of Business Economics forecast 3.1% growth this year and 3.2% in 2011.
The U.S. economy grew at a slightly faster pace than originally thought during the last three months of 2009, according to a government report Friday.
The nation's gross domestic product, the broadest measure of the nation's economic activity, grew at an annual rate of 5.9% in the quarter, the Commerce Department reported. Economists surveyed by Briefing.com had forecast that the revision would show the same 5.7% growth that was originally reported a month ago.
The report is another sign that the U.S. economy has pulled out of the deepest downturn since the Great Depression. The solid growth, the best improvement for the U.S. economy in more than six years, follows a 2.2% annualized increase in the third quarter. Most economists now agree that the recession probably ended at some point last summer.
Still, the strong end of 2009 wasn't enough to make up for the even larger declines in the first half of the year. For the full year, GDP fell 2.4%, the biggest decline in the annual reading since 1946.
The recovery is widely perceived as fragile. Federal Reserve Chairman Ben Bernanke testified to Congress this week that the central bank will need to keep interest rates low in order to support the economy.
The recovery is even less apparent to the typical American. Job losses have continued in all but one month and most economists believe unemployment will stay close to 10% for much of the year.
Credit remains tight for small businesses and consumers and the recovery in housing prices is uneven at best. The most recent survey of 5,000 American consumers by the Conference Board found the greatest level of worry about the current state of the economy in 27 years.
"The fourth quarter GDP revision tastes great, but is less filling," said Robert Dye, senior economist of PNC Financial Services Group. "We need the meat and potatoes of private-sector job creation in order to sustain this recovery."
This GDP reading showed consumers still very much on the sidelines, as spending by individuals increased at a far more modest 1.7% annual rate in the quarter. Instead, it was businesses and the federal government that led the way on growth.
More than half the growth in the quarter was due to the fact that businesses were no longer slashing inventories the way they did in the first three quarters of the year. Spending on equipment and software, often seen as a proxy for business investment, grew at an 18.2% rate in the period.
Nondefense spending by the federal government grew at an 8.3% rate. But budget-strapped state and local governments cut spending at a 2% rate, while defense spending fell 3.5%, leading to a decline in overall government spending.
A 22% rise in exports also was a major contributor to growth.
The lift from the rebuilding of inventories and the government stimulus package passed last year is expected to wane later this year, meaning growth will likely slow to a more modest rate. Economists surveyed by the National Association of Business Economics forecast 3.1% growth this year and 3.2% in 2011.
--------------------------------------------------------------
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