Panelists Accentuate the Positive at IMCA Conference

Golub noted that, viewed in isolation, stocks are already "screaming cheap" by historical standards. But taking into account macro economic factors that are of concern to investors – among them the European sovereign debt crisis and the U.S. budget deficit – stocks are likely at "fair value."

Golub added that there is a "huge disconnect" between the market performance of bonds and equites, the first of which suggests a bear market may be on the horizon and the second pointing to continuing market optimism. Going forward, said Golub, investors should expect continuing volatility.

Ezrati said that baby boomers who are edging close to retirement should not expect that equities will recapture the highs of the secular bull market enjoyed between 1992 and 1999. He added that the market proved itself capable of "absorbing bad [economic] news" but is not "ready to stretch [stocks] valuations."

Turning to Europe, Ezrati said that investors have been heartened by the recent actions of the European Central Bank, which is injecting liquidity into the Continental banking system and, thereby, preventing onerous interest rate increases on government bonds. But these actions, he noted, have only bought European countries time to address their budget problems. To achieve a permanent resolution of the European debt crisis, fundamental reforms of European entitlement programs are essential.

Golub agreed, but voice skepticism that leaders of Euro countries facing the deepest debt problems – notably Greece, Spain, Italy and Portugal – have the political will to effect such reforms because of a likely public backlash.

"There's a 100% chance these countries will agree to a plan to keep them in the Euro [currency] zone, but there's a zero percent chance that they'll implement such a plan," said Golub "Greece will say what's needed to secure bail-out funds, but they're not going to raise the retirement age in the country."

Given the financial crisis facing the Continent and the need for additional austerity measures to reduce sovereign debt, Golub added, zero percent GDP growth without  any further"credit events" can be interpreted as "good news" for Europe. Ezrati concurred.

"Europe is facing a possible recession," he said. "If the Continent adopts more austerity, the cure may be worse than the disease. Europe has a lot more hurdles to jump through."

The panelists agreed that the Federal Reserve has acted more aggressively than the ECB in recent months to loosen credit markets. But he noted the Fed is now "showing desperation" because it's "running of out tools" with which to boost the U.S. economy. As a result, he added, Federal Reserve Chairman Ben Bernanke believes that additional economic stimulus measures may be needed.

If the U.S. economy should fall anew into a recession, said Golub, then investors should expect on average a 35% decline in company earnings and 50% dip in stock valuations. But he, like Ezrati, considers this outcome unlikely, given the economy's expansion in recent months, which is now growing at a 2.5% clip.

Golub expressed optimism about growth in stock valuations for the U.S. retail and manufacturing sectors. He noted also that emerging markets, such as India and China, remain good bets for investors because of continuing robust economic growth in these regions.

Responding to an audience question as to whether Americans need to readjust their expectations for retirement, Ezrati said many already have.

"After 2008, Americans significantly boosted their savings," he said. "I would have been skeptical before the credit crisis that they could make this adjustment. But they have."