Online Extra: A Winner Backs International Markets
C. Kim Goodwin's track record speaks for itself. The winner of BusinessWeek's 2004 Fearless Forecaster competition was less than 1% off actual index levels, and then almost had a repeat performance in 2005 when she came in a close second. She didn't perform as well in 2006, coming in 35th out of 77 forecasters by competition's close on Dec 6. The Dow outperformed her 11,850 expectation while the S&P 500 and NASDAQ fell below forecast levels.
With a yearend prediction of 11,973 for the Dow in 2007, Goodwin's forecast sits comfortably on the bearish side of the spectrum. She predicts that disconcerting signs in the housing market, including noticeable downturns in historically strong areas, will lead consumers to be more circumspect in their spending.
"We're still in a situation in which U.S. investors do not believe the data that are coming out," she says. But this year, Goodwin, based in London as the head of Equities for Asset Management at Credit Suisse, is banking on a reaction to the hard data that will bring the market averages down to reality. The slowdown in the U.S. economy matched with a weaker dollar will lead to at least one clear winner for investors: international equity markets.
Staying Outside the U.S.
For 2007, Goodwin recommends 35% of portfolio allocation in international stocks vs. a 20% allotment in U.S. stocks. "My confidence in international markets has more to do with the fact that they are outside the U.S.," she says, adding that even single-digit growth in developing countries would be more attractive than investing in the U.S. "Japan could surprise us on the upside and even in the emerging markets there is a lot of potential."
Goodwin's move to Credit Suisse in September of this year has expanded her international perspective thanks to the opportunity to manage teams across seven global regions. Even with a schedule that has her jetting from Tokyo to Singapore and on to Australia within a matter of days, she says it is exactly like working in the U.S.—just across a larger territorial arena.
Despite consistently outperforming investment experts in BW's Fearless Forecast survey, the native Nebraskan says she's no market guru. While two decades of hands-on investment experience always helps, it's really the team effort that gets the job done. "Everything that I do is a result of the individual people that I manage," she says. "Wherever I go I'm going to make sure that I have a talented team."
By Sonal Rupani