Leuthold Weeden Capital Management

Readers of this byline appreciate its ardor for “Perception,” the data and joke-rich investing monthly put out by The Leuthold Group. The April book crunched surprising data that got me thinking about parallel drivers of long-term market performance: the significance of dividends to total return, and exposure to smaller-cap companies.

Leuthold Group CIO Douglas Ramsey previews today's markets and discusses his investment strategy. He speaks with Betty Liu on Bloomberg Television's "In The Loop."

Doug Ramsey, Leuthold Group, discusses where the markets go from here.

Japan’s new Prime Minster Shinzo Abe made more of an impact on the market than anyone else last month. In what the market has dubbed “Abenomics,” Abe not only launched a new fiscal stimulus, but also pushed the Bank of Japan to raise its inflation target from 1% to 2% AND agree to a new open-ended QE program.

The idea that buying last year’s losers for a win this year is a perennial for investors who think they can benefit from a quick rebound.

Eric Weigel, director of research for the Leuthold Group in Minneapolis, says you have to be careful with how you play the "China effect." Buying baskets of commodities through managed index funds can skew results because of the funds' weightings. The Dow Jones/UBS index, for example, has twice as much invested in agricultural commodities than the rival S&P/Goldman Sachs Commodities Index, which has more than 60 percent of its holdings in energy.

First, consider the macro picture: Eric Weigel, director of research at the Leuthold Group, notes that the broad-based inflation that typically drives prices higher is nowhere in sight. Plus, commodities haven't yet shown they're unlinked from recent years' tight correlation with stocks, reducing their use as diversifiers.

Higher stocks will spur individual investors' demand, not the other way around, says Leuthold's Ramsey. And buy the "Bridesmaids."

Doug Ramsey, chief investment officer at Leuthold Group, expects a challenging year. His call is for a flat market next year.

One reason he is paying closer attention to the historical tendency for stocks to suffer in post-election years is the fact that the bull market, which began in March 2009, is now 45 months old and nearing its fourth birthday.

And the median lifespan of bull markets -- half have lasted longer, half shorter -- over the past 50 years is just 42 months. "The bull is aging," he says. "It has moved past its median life expectancy."

"European stocks are so cheap they might go up in response to even a half-baked rescue plan," says Doug Ramsey, chief investment officer for the Leuthold Group.