Investment choices seen tougher in 2010

Investment choices will become tougher in 2010, after the easy money reaped across most asset classes this year, as weak credit availability and a high jobless rate temper U.S. economic growth, said money managers at the Reuters Investment Summit in New York.



Without a meaningful pick-up in bank lending, businesses will be hard-pressed to grow at rates typical of a post-recession environment, analysts said.



"The concern we have is whether or not people have money to spend, or money to borrow," said Max Darnell, chief investment officer of investment firm First Quadrant.



Without improved access to credit, a double-dip recession is possible, said Darnell, whose fund manages nearly $18 billion.



Growth in real gross domestic product in 2010 will likely be 3 percent or slightly higher, because the "velocity" of money, or bank lending, remains low, Bob Doll, vice chairman and chief investment officer of global equities at BlackRock Inc, the world's largest investment firm, said.



Growth of 5 percent or slightly higher is more typical coming off a recession low.



Also clouding the investment climate, lingering high unemployment and sluggish wage growth are likely to keep a chill on consumer spending, which traditionally is the engine for U.S. growth.

As the U.S. equity market enters a phase driven by fundamental earnings growth, Doll said potential deflation trumps other worries.

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