Thursday 08Nov2012 - What Next? Pay Attention to the Presidential Cycle.

Charlie Rose talks with Jeremy Grantham of Investment Management firm GMO.

“As an investor, what do you do?

“I’ve hero-worshipped the presidential cycle. Going back to 1932, if you take the first and second year together, they’ve had no real return in the market. All of the return has been compressed into a gigantic Year Three and a respectable Year Four. For us, the cycle years start on October 1st. So now we’re in the dreaded first year. And we have Republicans threatening to add fiscal constraints into a very fragile economy. We have the European situation. We have China stumbling in an incredible slow-motion style. I think it’s a really good year to keep your head down….

I am going to be careful, particularly for the first half of next year. Great brands of blue chips are not so bad in the U.S. Emerging countries are about fair price. Beaten-down European stocks, particularly the so-called value stocks, are probably a little cheap, although risky. And resource stocks, once they reflect the weak economy—and we’ll get another whack-down—will be a wonderful long-term purchase. Farmland and forests, which should be the backbone of any long-term, serious portfolio. … It will also be a good time to buy in. “

JD - Personally, I am very cautious going forward and waiting for better opportunities to reinvest cash sitting on the sidelines.

A couple of options for cash held on the sidelines with current low interest rates.
Money market funds are an option.
But Investment Savings Accounts provide a better yield at about 1.25%
Some examples are:
RBC Investment Savings Account. Fund Code RBF2010
TD Investment Savings Account. Fund Code TDB8150
Altamira High-Interest CasPerformer. Fund Code NBC100