Local investment gurus address N.S. Chamber

DANVERS – Two of the region?s leading investment and market analysts on Tuesday gave a generally bullish forecast for 2012 and offered tips to maximize returns, protect assets and stay ahead of inflation.Robert Lutts, president and chief investment officer of the Salem-based Cabot Money Management, and John Traynor, chef strategist and wealth manager for People?s United Bank, were keynote speakers at the breakfast forum of the 2012 North Shore Chamber of Commerce Business Exposition at CoCo Key Hotel in Danvers.?In 2007 and 2008 we were at the peak. Where are we today? We?re not at the peak anymore, but we?re not sliding down. We?re on the recovery, and you have to think about that as you position your investment portfolio,” Lutts said.Major factors influencing the global economy, he said, are the shift of wealth and power from the west to eastern countries, government influence on markets and risk avoidance. On that latter, he commented, “We?ve never seen the amount of defensive (investment) behavior there?s been. People have basically been hiding under a rock all over the globe for the last three years. That?s going to stop and, when it does, those key flows of funds are going to have major impacts on different areas of the economy.”Lutts touted investment opportunities in emerging markets of Indonesia, Singapore, Malaysia, China and India, explaining capital in these markets grows at twice the rate it grows in developed economies.?A lot of people think I?m anti-American because I talk about emerging markets. Nothing could be further from the truth,” Lutts said. “We are a global economy today and jobs and innovation in this country have impact all over the globe.”Lutts cited Apple Inc. as an example, saying it has 50,000 U.S. workers but its products have created 700,000 jobs around the world, and profits come back to the U.S.?We are without a doubt the most resilient, innovative and adaptive people on the planet and we figure out how to work the economy very well no matter what?s thrown at us, and that?s what?s causing the economy?s recovery right now and I think it will continue.”Offering investment tips, Lutts said, “Stocks are a lot safer than most people think. Bonds are much riskier today.?Monies have moved into bond funds and bond instruments with reckless abandon over the last two or three years and we think that?s going to end. And when it does, there will be tremendous opportunities in risk-based assets.”He warned about global currency debasement, spurred by inflation, and how to protect against it.?Currency debasement is something that is not understood at all,” he said. “Those dollars that are in your pockets today will buy about 5 cents compared to 50 years ago and that?s because we?ve had an average of 2 percent inflation (annually) over the last 50 years ? You need to think about ?How do I protect my purchasing power of my wealth?? “He also warned that inflation is an underestimated danger.?Today nobody is worried about inflation,” he said. “But you have to remember that governments are manipulating interest rates to get the lower level today. Inflation is starting to build and I think down the road, in two or three years, it?s going to be a real problem.” He recommended people invest in assets that adjust to inflation, like gold and silver, jewelry or land and real estate.?Don?t put your money into the dollar and put it under a mattress, because you?re going to lose your purchasing power really fast that way,” he said.Lutts also explained in depth why he?s bullish on gold.?Gold is almost $1,700 an ounce today. When I spoke to you last year it was $1,300 or $1,400, and the year before it was about $1,000. I think a year from now it?s going to be over $2,000 and the reason is because of all of this currency debasement that is going on.”He said he?s also bullish on computer technology and energy sectors.Traynor told the audience of about 250 that he spent last weekend preparing a report on the second-quarter out