Liz Ann Sonders Offers 'Economic & Market Outlook' at SHU Forum

News Story: November 1, 2010
Liz Ann Sonders

Liz Ann Sonders, the senior vice president and chief investment strategist for Charles Schwab & Co., shared her perspective on the present economic situation during a special forum at Sacred Heart University on Wednesday, November 10. Her assessment was, on the whole, uniformly upbeat.

Sonders was introduced by Sacred Heart University’s interim president, Dr. John J. Petillo, as one of the “25 Most Powerful Women in Finance,” according to American Banker/US Banker, and one of the “Top 50 Women in Wealth,” in the judgment of Wealth Manager. She is quoted regularly in the business press and appears often on a variety of broadcast outlets.

Despite ongoing stress points in the economy, Sonders feels the essentials are sound – and improving. Supporting her argument with dozens of slides, she noted that the stock market has improved by more than 80 percent, and U.S. corporations are sitting on $2 trillion in reserves. They are bedeviled by the highest corporation taxes in the world, she cautioned, and continuing uncertainty about such key issues as healthcare costs and future tax liabilities.

The nation’s continued high unemployment rate – at 9.6 percent – is not a surprise, she pointed out, since employment figures always lag behind other indicators in a recovery. One ironic reason is that as conditions improve, people who had pulled themselves out of the labor market begin to return. She advised her listeners – many of them students in SHU’s John F. Welch College of Business – to stay in school since the employment figures for college graduates was far more hopeful than for those with less formal education.

As a self-confessed “contrarian,” Sonders always looks for opportunities in the struggling sectors: “Sell out on strength, and buy in on weakness,” she counseled. “Only in the stock market do people hate a bargain and look to buy when prices are at their highest.” In other contrarian advice, she asserted that the economy would get its biggest boost not by keeping interest rates at historic lows but by actually raising rates. Then businesses would feel the incentive to invest now – before rates might rise further. In any event, she counseled that “get in” and “get out” are never investment strategies and that investors should make a considered judgment as to where their money will do the most good and stick close to that pattern in good times and bad.

Liz Ann Sonders was a guest of Sacred Heart University’s Jack Welch College of Business, which sponsors regular appearances by respected authorities in business and finance. Her presentation in the Schine Auditorium was followed by numerous questions from the floor and a lively discussion of the issues she had addressed.