“‘The key to 2010 is to expect volatility, and anyone not prepared for that is going to be rudely awakened…There is so much hinging on such little information. We all know the government wants to pull back the stimulus, but no one knows what it’s going to look like when the government isn’t supporting the markets.’”

“It seems like every time they announce an auction, it’s a huge amount of issuance,” said Managing Director and head of Fixed Income Kenneth Naehu, at Bel Air Investment Advisors. “The question is whether the market can continue its willingness to support all this supply.”

“At $1,000, it would still be more expensive than the average home computer, but that’s the price point below which personalized medicine is considered far more economically viable. The lower the cost of genomic sequencing, the greater the shift analysts expect to see in the allocation of research funds toward the consumer market.”

The lower the cost of genomic sequencing, the greater the shift analysts expect to see in the allocation of research funds toward the consumer market, says Timothy McCandless, an analyst at Bel Air Investment Advisors in Los Angeles.

“Gary Flam, a portfolio manager with Bel Air Investment Advisors, said he found Monday’s pullback in prices of long-dated Treasury bonds more encouraging than the rally in stocks, which came on light volume as traders took off for the holiday.”

Gary Flam, a portfolio manager with Bel Air Investment Advisors, said he found Monday’s pullback in prices of long-dated Treasury bonds more encouraging than the rally in stocks, which came on light volume as traders took off for the holiday. … “When you see the yield curve steepen like that, it’s traditionally been a pretty good predictor that the economy is going to be strong,” causing lenders to demand higher payments to justify making long-term loans, he said.

“Bel Air Investment Advisors is staying underweight on consumer discretionary names in the separately managed accounts it oversees. The consumer’s return to frugality, while expected to normalize, will remain ‘an entrenched outlook in the future,’ says Gary Flam, who manages $600 million for high-net-worth investors at the Los-Angeles-based firm. ‘Even if they wanted to go back to spending like they did in 2005, they can’t’ without wage gains, which will be nearly impossible with so much slack in the labor market.”

“Wage increases are unlikely, contends Reed Halladay, managing partner at Bel Air Investment Advisors LLC, which manages $5 billion.”

Wealth Management Firm Donates Time and Money as Part of Its Annual Holiday Community Outreach and Year-Round Philanthropic Programming

LOS ANGELES – December 14, 2009 – Bel Air Investment Advisors LLC (Bel Air), an independent wealth management advisory firm for high net-worth individuals, families, trusts and foundations, has kicked off the holiday season as it volunteers time and resources as part of its annual holiday season philanthropic initiatives to a number of LA-based nonprofit organizations.

“‘Unemployment rates will stay stubbornly high relative to the past 25 years and will not drop below 8% for next three to four years…Extended periods of high unemployment will lead to low wage growth, since an excess supply of workers will give employers little reason to raise wages.’”

“Unemployment will stay stubbornly high relative to the past 25 years and will not drop below 8% for the next three to four years,” said Gary Flam, managing director and portfolio manager of equities at Bel Air Investment Advisors. “Extended periods of high unemployment will lead to low wage growth, since an excess supply of workers will give employers little reason to raise wages.”

“You could say maybe Dubai isn’t the rationale behind it, but it’s a shot across the bow,” says Gary Flam, portfolio manager with Bel Air Investment Advisors in Los Angeles.

“Over the last several months, the weakening dollar has definitely led the market higher, but historically a weak dollar isn’t good for stocks over the long term,” said Tim McCandless, senior equity analyst at Bel Air Investment Advisors.

“The economy has not proven it can stand on its own two legs yet and the market is acting very tired,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors. “The leadership names have started to roll over and the stocks that have outperformed lately are the very defensive utilities, staples and telecom. I find it hard to believe that the bull market can make a significant move higher driven by utilities and telecom.”

“It has become a good business strategy,” said Darell Krasnoff, managing director of Bel Air, which last year added a company’s green credentials as one factor in making investment decisions. “It was less philosophical and more pragmatic.”

“The key question at this point is whether new leadership will emerge. Will volume and breadth come to confirm this rally, or are we nearing a near-term peak here?” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles.

LADWP is coming to market after a wave of state issuance, but the utility should find strong demand for its higher-quality paper, said Kenneth Naehu, head of fixed-income trading at Bel Air Investment Advisors in Los Angeles. “I don’t think that deal’s going to have a problem,” given the expected sizing of the tax-exempt and BAB series, Naehu said. “The bigger question is whether there’s a saturation point for California bonds.”

“You have Disney, you have a couple of retailers, but it’s a relatively quiet day,” says Gary Flam, portfolio manager at Bel Air Investment Advisors. “The market overall for the last week or two weeks has seemed tired. The market is right up there at highs, but we are seeing rallies on lower volume.”

Ken Naehu, who manages bond investments at Bel Air Investment Advisors in L.A., believes the state’s budget woes are far from over, which Schwarzenegger acknowledged Tuesday. Still, a 4% tax-free yield on a bond maturing in less than four years was too good an opportunity to pass up, he said. “We gave them a large order,” Naehu said.

“The consumer in the U.S. is going to be in retrenchment, or the back-packer mentality for a long time,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors. “Even if they wanted to go back to spending the way they were, they can’t.”

“The overall market really seems fatigued at this point in the rally,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “The key question is, is this just a pause because solid earnings were expected and then we take off from here, or has the market petered out and we’re due for a pullback?”

Investors interested in distressed investments can lend money to the business directly or purchase equity, said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles, who counsels clients with at least $20 million in investable assets.

At Bel Air Investment Advisors in Los Angeles, for instance, ETFs can “complement an active-management strategy where we want to get exposure to a specific idea,” such as gold, says Darell Krasnoff, managing director of the boutique advisory, which runs $4 billion.

“November and December, you usually get this rip to the finish. Maybe you get the opposite this year,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors.

“I’m not a strong buyer at these levels,” said Ken Naehu, who oversees $2.5 billion of bonds as head of fixed income at Bel Air Investment Advisors in Los Angeles. “Investors should know that the issues and problems with the state’s finances have not been resolved.”

“The entire third quarter was one big run. To me, this is just a healthy working off of an overbought condition,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors. “Still, putting money to work right now is akin to picking up nickels on the train tracks. You may get a couple dollars in your pocket, but you run a significant risk of getting run over.”

“Fear is still very, very fresh in people’s minds and the magnitude of the potential disaster that we had last September through March, I think still has investors pretty skittish,” said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles. “So our sense is that some bad news can shift sentiment pretty quickly.”

The yields on the tax-exempt notes were a key lure to investors tired of storing cash in money market funds with much lower yields, said Craig Brothers, fixed income portfolio manager at Bel Air Investment Advisors in Los Angeles. “People are so hungry for yield,” Brothers said. “We’d just as soon use RANS as our money market.”

Darell Krasnoff was interviewed on Squawk Box in the segment “Market Task Force.”

Ken Naehu, a managing director with Bel Air Investment Advisors, says he would be attracted to the notes if they yielded 3 to 3.5 percent, but “I think it’s going to come out around 1 percent, give or take.” Naehu says there is “very, very little, if any” chance the notes won’t pay off, but adds that he would be more comfortable if the notes had a priority claim.

Despite worries that the rally has outpaced the economic recovery, the market “just doesn’t seem to want to fall,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “In April and May the market was rallying despite a lack of good economic news,” Flam said. “Now that you are getting better news, including Bernanke’s comments, it’s hard for investors to sit on the sidelines.”

“Really it seems like to a certain extent if there’s any hesitancy it’s to be in cash,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “Now you’re seeing good economic data. There’s a hesitance to be in cash and people are looking for a pullback to get more invested. It seems to be the investor sentiment, though that’s not exactly our sentiment.”

By contrast, Ken Naehu at Bel Air Investment Advisors in Los Angeles said he is looking forward to California’s RANs, anticipating a “reasonably attractive yield.” “If the yield is too low, I’ll just pass … But I expect the yield to be substantial enough to take a look at it,” he said.

Short-term ratings below the top tier will keep money market funds out of the deal. In that case, “the bar has to be set to attract individual investors and those like me who invest on behalf of individual investors,” Naehu said.

“The long end is different,” said Kenneth Naehu, managing director for fixed income at Bel Air Investment Advisors. “It’s institutions, and those guys are playing for relative value. Individuals want yield.”

“The market to a certain extent is Bobby Ewing in ‘Dallas’: The last 18 months were a big dream. The greed factor has overrun the fear factor,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “You see these speculative names running up 10 to 15 percent on a daily basis. It shows you the speculative fervor has returned.”

Andrew Palmer, managing director, was ranked in Barron’s “Top 100 Independent Financial Advisors” for 2009.

“There is simply no growth yet from anywhere except Asia, so a slowdown there would hurt those areas that benefited most from that growth – commodities and natural resource areas,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors.

“We’ve seen some stability in the economic date and some cost-cutting from corporations, but we really need to see the recovery of the consumer,” said Tim McCandless, senior equity analyst at Bel Air Investment Advisors.

“We don’t expect any changes from the Fed,” said Tim McCandless, senior equity analyst at Bel Air Investment Advisors. “Eventually they will outline an exit strategy, but not yet.”

Portfolio Managers from High Net-Worth Firms, PIMCO, Artio Global and Bel Air Investment Advisors Shed Light on Investment Strategies Amidst Market Volatility

LOS ANGELES – August 10, 2009 – Bel Air Investment Advisors LLC (Bel Air), a leading independent wealth management advisory firm to high net-worth individuals, families, trusts and foundations, hosted an exclusive luncheon and discussion on Thursday, August 6th, titled “Fixed Income: Global Disarray & The California Conundrum,” for their guests at the Hyatt Regency Century Plaza in Los Angeles, California. Featured keynote speakers included Patrick Maldari, CFA, senior portfolio manager at Artio Global Markets; Mark Romano, CFA, senior vice president at PIMCO; and Ken Naehu, partner and head of fixed income at Bel Air Investment Advisors.

“Big picture, there’s a massive amount of issuance that needs to come to the marketplace in the near future,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors in Los Angeles. “Supply will continue and will weight heavily” on bond prices, he said.

California’s debt has been downgraded but it’s still a good investment, Kenneth Naehu, managing director of fixed income at Bel Air Investment Advisors told Markets Media. “The press tends to report a lot of fiscal mismanagement by California but doesn’t identify the security that’s behind many of its bonds,” he said.

“If two-thirds of the economy is struggling right now, it’s hard to make the case that we’re going to have sustainably strong economic growth,” said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “What we’re seeing now is everything seized up in the first quarter of the year—now it’s loosening up a little bit but it is by no means seeing any sign of sustainability.”

By contrast, Ken Naehu, head of fixed income at Bel Air Investment Advisors in Los Angeles, said the agreement should end speculation over whether California would not make payments on its debt service to bondholders. … “Why in the world would you cut your arm off and not make debt service payment when it’s such a small part of the budget?” Naehu said.

Ken Naehu of Bel Air Investment Advisors in Los Angeles, who represents high net-worth investors, was among buyers for what he regarded as an appropriately priced offering. “I would qualify (Sacramento airport’s bonds) as a safe quality investment,” he said.

“Sophisticated buyers will still buy the state’s credit, but they just want to buy it as cheap as possible. I would like to see the bonds trade down in value so we can buy more,” said Ken Naehu, who oversees more than $2 billion as head of fixed income at Bel Air Investment Advisors in Los Angeles. “There’s a lot of market timers that are trying to buy California bonds when they hit the low point in terms of rating-agency press. They want to take advantage of the maximum headline risk.”

“Among the risks of P2P loans are insufficient information to determine whether borrowers will repay, said Ken Naehu, who manages more than $2 billion in fixed income at Bel Air Investment Advisors LLC in Los Angeles. He said he can purchase 10-year California state tax-free bonds that yield about 5 percent. S&P rates California the lowest U.S. state, giving their general obligation bonds an A grade, the sixth-highest of 10 investment levels.”

“‘People are paying me to make money,’ said Gary Flam, a portfolio manager for Bel Air Investment Advisors. ‘This is a clear case of putting your own survival over what clients are paying you to do.’”

“Caution about earnings was reflected by the pullback over the last few weeks,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “But as we move through earnings season and the results are for the most part in line or better than expected, investors will move back into stocks.”

“Last quarter’s earnings season was about stabilization,” said Gary Flam, a portfolio manager for Bel Air Investment Advisors. “As soon as investors heard that, stocks went up. But now the transition is to focusing on the shape of the recovery and that’s a flat line with few seeing actual growth.”

“‘We’ve hit a bottom from the economic standpoint, but I don’t think it’s a ‘V’ from the standpoint of an economic recovery,’ said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. ‘The market seemed to price in a ‘V’ recovery and right now it’s digesting the fact that it will be a bumpy recovery and a slow recovery.’”

“Taylor is ‘one of the most influential people in my life…’”

Bel Air Investment Advisors Ranked in Top 100 RIAs

Mr. Flam: From a broader sense, what we’re striving to do on both of the strategies that we manage internally is use a top-down approach that focuses on identifying broad multi-year tailwinds and avoid headwinds that we see in the marketplace.

One is that their careers are highly uncertain and often brief. In the business world, it’s fairly easy for someone with a seven-figure income to guesstimate their future earnings, says Ken Naehu, a managing director of Bel Air Investment Advisors in Los Angeles.

“In the entertainment world, you can be very hot and then not. You can’t spend like you will have a 20-year career at that type of earnings. Part of what an adviser is supposed to do is tell them what they don’t want to hear: You have to invest and protect this money because it might be all you have.”

“It would be expensive if they brought the deal tomorrow, but if they take longer it will be that much more expensive,” said Craig Brothers, managing director at Bel Air Investment Advisors in Los Angeles.

“The big question with these is, does the capital raise overcome the single biggest concern? If not, dilution will remain the trumping factor,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors.

“The marketplace doesn’t feel healthy, but it feels better than it did back in December, so you are taking out some of that fear premium,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

Retail investors, more so than institutions, “read the paper, read that the state of California is bankrupt. They perceive the risk of default to be elevated,” says Ken Naeuhu, managing director with Bel Air Investment Advisors.

“The biggest issue facing investors now is trying to make sense of the bond market implications for the economy, as well as what’s going on with the dollar,” said Gary Flam, a portfolio manager at Bel Air Investment Advisors.

“The fear factor is diminished,” said Todd Morgan, senior managing director at Bel Air Investment Advisors. “The economy is still sick, but things are starting to look a little better.”

“The breadth (of the rally) is a little misleading. The leadership of the rally shows off the lows is more the low-quality names,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “Now as we look forward we think you’re looking at more modest risk-reward ratios. The leadership is going to come from quality.” In an economic environment that is likely to have to shoulder double-digit unemployment and continued pressure on both consumers and companies to cut costs, quality could be key. “The recovery from this economic downturn and this recession will be muted. In a tough economic environment it’s going to be the strong getting stronger,” Flam says. “Companies that are leaders in their businesses, franchises that are self-funding with good balance sheets, that are going to invest in their businesses, that are going to acquire some of the missing pieces in their businesses to strengthen their competitive positions, those are the ones that are going to do well in the next year-plus.”

California’s creditworthiness reflects the state’s ability to manage its budget, not its ability to repay debts, said Kenneth Naehu, a managing director of Bel Air Investment Advisors LLC in Los Angeles, which oversees $5.5 billion in investments,including California debt. Debt payments are given priority, under the state’s constitution, above everything but spending on schools. “There’s going to be tough decisions made — programs will be cut, taxes may be raised,” he said. “But at the end of the day, the debt service gets paid because it gets higher priority than just about anything else.”

“The marketplace doesn’t understand that municipalities are not rated on their ability to pay, but on their ability to manage their budget,” says Kenneth Naehu, fixed income portfolio manager at Bel Air Investment Advisors LLC in Los Angeles.

“We’ve moved from a max defensive position to a little less of one,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors. “That said, we’re not going out into the deep end, just moving out of the kiddie pool.”

Andrew Palmer, managing director, was ranked in Barron’s “Top 100 Financial Advisors” for 2009.

“We have been and remain cautious on financials and banks in particular. That’s our stance for well over a year,” said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “This rally not withstanding, we continue to hold that negative stance and it’s because of those credit concerns.”

Wall Streeters are anticipating poor first-quarter results, said Gary Flam, portfolio manager at Bel Air Investment Advisors. But they are also expecting a better outlook, particularly after many companies failed to provide any outlook last quarter. “The fourth quarter was expected to be poor, but management also said ‘we have no visibility, things are too uncertain,” he said. “This quarter, visibility and stabilization will be the keywords that people listen for on the conference calls.”

“This rally so far seems to be pinned on the banking system having some sort of stabilization … that things did not get worse than management expected,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “That’s the first leg of it. That gives investors some comfort of what it’s going to look like.”

“We’re more neutral on cash than we were last September, but if this rally goes much further, we’d be looking to raise cash,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors.

Darell Krasnoff was interviewed on Power Lunch in the segment “What to Do with Cash Now?”

Lockyer may be pressed to pull off another large GO sale next month, said Craig Brothers, a managing director at Bel Air Investment Advisors in Los Angeles.

“The market is making the assumption that the Fed is either going to buy back long bonds or is willing to do so at some point,” said Kenneth Naehu, managing director of fixed income at Bel Air Investment Advisors.

Tax-exempt bonds issued by utilities to finance long-term natural-gas supplies and backed by banks such as Merrill Lynch & Co. should be attractive to investors who normally purchase taxable debt, said Ken Naehu, who manages more than $2 billion in fixed-income assets. The tax-free bonds, backed by revenue from sales to customers and carrying the rating of the bank that guarantees the delivery of the gas, yield as much as taxable debt issued by the banks themselves, said Naehu, head of fixed income at Bel Air Investment Advisors in Los Angeles.

“We’re a buyer,” said Ken Naehu, head of fixed income at Bel Air Investment Advisors in Los Angeles. “Even if you took the state’s revenue and cut it in half you would still have substantial debt service coverage.”

Ken Naehu, who manages more than $2 billion in fixed income assets at Bel Air Investment Advisors in Los Angeles, said he expected the Los Angeles Community College deal to attract demand because the bonds carry high credit ratings. Still, some investors may pass on the deal, anticipating a $4 billion bond sale by California state March 23 that may offer higher yields. “A lot of larger buyers out there are waiting for the state deal to come,” Naehu said.

“I think it’s going to take a lot more time for the economy to work through all the issues, but the valuations on certain companies are appealing,” said Gary Flam, portfolio manager at Bel Air Investment Advisors.

“Until proven otherwise, we’re in a bear market and this is a rally in a bear market and not something more,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. Flam said that typically the biggest rallies occur in bear markets. He also said that he doesn’t buy the argument that since Citigroup said it might be profitable, and the uptick rule might be reinstated, that the market is now on better footing.

“The economy has continued deteriorating, whereas most people, myself included, had expected it to start stabilizing by now,” says Gary Flam, portfolio manger at Bel Air Investment Advisors in Los Angeles. “Given there’s no stabilization in the economy, people don’t know where earnings are going to go. It’s a huge moving target as to what you are using to stay stocks are cheap.”

“Longer term there are concerns about the recessionary front forcing rates lower, but there is also the concern about the tremendous issuance of debt we are facing and whether foreign participation will be there,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors in Los Angeles.

“There is tremendous uncertainty and a lack of confidence in the markets right now,” said Todd Morgan, chairman and CEO of Los Angeles-based Bel Air Investment Advisors. “People don’t want to be pushed to do anything. Even though they might miss a great buying opportunity, it’s important to be sensitive. Nobody can pick a bottom.”

On December 12, 2008, as part of Bel Air Investment Advisors’ year-round philanthropic program, the Los Angeles-based firm donated both company time and money to help the New Millennium Secondary School (NMSS) in Carson, California, with a much needed “facelift.”

“I think the ultimate lows in the stock market will be this year, but from a practical standpoint, you need to see some stabilization in the economy,” said Gary Flam, managing director and head of equities at Los Angeles-based Bel Air Investment Advisors LLC, which has $6 billion in assets. “The big-picture issue right now is that just as a few years ago, people thought the good times would go on forever, right now, people think the bad times will go on forever.”

“First and foremost you are talking about China. With $2 trillion of reserves they need to develop their own domestic demand. Using their reserves for that is a negative for (demand for) future Treasury issuance,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors in Los Angeles.

“We’re in the middle of this tornado and what you do in a tornado is go to the safest place to hide. This loss of market cap is the result, but going forward we have to look at those companies with solid balance sheets where they generate strong cash flow,” said Gary Flam, a portfolio manager with Bel Air Investment Advisors.

Investors will continue demanding hefty risk premiums for California debt because the state’s economy is still reeling from the collapse of the housing market it plans to sell as much as $5 billion in new debt, said Ken Naehu, who oversees $2 billion of municipal bonds at Bel Air Investment Advisors in Los Angeles. “There won’t be a tremendous change in perception purely because the budget has passed,” Naehu said. “The municipal market is dominated by retail investors now and those investors have been scared, have been spooked.”

“There are a lot of the short-term, variable-rate instruments that have been used as a vehicle for long-term, leveraged trades,” said Kenneth Naehu, who manages bonds for Bel Air Investment Advisors, a Los Angeles firm that oversees $5 billion for clients. “There is a potential for a huge sell-off in the secondary market due to the issues you have right now.”

“The fear of trade is still on, and buyers can’t find a better alternative elsewhere,” said Kenneth Naehu, managing director at Bel Air Investment Advisors. “But the jury is still out whether the United States’ ability to finance at low rates will continue to hold true, assuming the fear of trade tapers off.”

“Investment markets are looking for a short-term fix and to date, nothing has been offered that will effectively turn the economy around in the short term,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

“Things don’t have to improve, but just stop getting worse,” says Gary M. Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “At the end of the day—outside certain credit spreads—you have seen very little stabilization for the economy, just increasing signs that things are getting worse. That’s made it very hard for the market to rally here.”

The 30-year bond has fallen more than other shorter term maturities, as investors grow cautious about inflation. “Most in the marketplace believe that in some juncture in the economy, there will be some inflationary pressures,” said Ken Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

“The new administration needs to come up with a new and more impactful financial plan to assure the country that the major banks are not about to fail or be nationalized,” says Todd Morgan, a senior managing director at Bel Air Investment Advisors in Los Angeles. “We need a significant impact to add to the country’s confidence of these banks. That’s what crushing the market the last few days.”

“What’s come out of financial earnings so far is how bad consumer credit quality is,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “People are hoping on a second-half recovery. GDP, earnings…just like they expected in ‘08. And I don’t see that happening.”

“You need a healthy banking system for a stabilized economy, and even once credit spreads stabilize that doesn’t mean we’re off to the races,” said Gary Flam, portfolio manager at Bel Air Investment Advisors.

“You should expect volatility – substantial volatility in this type of marketplace because the market is fragile,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

“I think they’re cautiously optimistic,” says Gary M. Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “Clearly they’ve been hurt by market declines, but I think they do realize that where valuations are now there’s tremendous opportunity to be adding to equity profits. Now is not the time to be running from stocks.”

“Where I want to be invested over the next six months, one year and two years is in quality names. You won’t see early-cycle, small-cap names lead a market recovery this time,” said Gary Flam, an stock portfolio manager for Bel Air Investment Advisors.