Trends Watch: May 25, 2017

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks to John Fox, CIO, Fenimore Asset Management/ FAM Funds

What is your investing outlook?

Stocks are going to do better than bonds. We invest in quality businesses that are profitable, generate a lot cash, have good balance sheets, are well managed and those types of companies tend to get valuable over time. Even though the market is at an all-time high and people are nervous and we look at all the choices out there, we like quality stocks the best. 

What is your outlook for the economy?

Continued growth at the pace it has been. We don’t see a big increase. We don’t see the type of growth the administration is talking about. Look at all the trends: We continue to add jobs, wages are going up, housing is going strong, corporate earnings are up, oil prices are up which helps with industrial investment, bank lending is positive and credit is still benign.

What keeps you up at night?

You worry about a recession. Valuations are fair-to-high for stocks in general. I really worry about my companies and that they continue to do well. It’s not very dramatic;  I sleep pretty well.