VIRGINIA BEACH, VA, October 30, 2006 -- The Commerce Department reported this week that the economy grew at the slowest pace in more than three years.

Jim Flinchum, a Virginia Beach-based expert on economics and investing, says it's not as bad as it looks.

"GDP growth has slowed dramatically. In the first quarter, it was an unsustainable 5.6%. Everybody knew it was slowing. Expectations for the third quarter were 2.2%. Instead, it was only 1.6%, indicating a weaker economy than expected. This raises the possibility of a "hard landing" or recession. It lessens the likelihood that the Fed will raise rates.

"However, it is not as bad as it looks. Once you dig into the number, you find the slowdown was almost entirely due to housing. Ignoring that, the economy is not so bad, but slowing nonetheless. Investors should do nothing at this time. Large cap stocks benefit from such slowdowns, but their prices are already sky-high. Be prepared to reduce holdings in big companies early next year when the rotation into big company stocks reverses."

In your continuing coverage of this story, feel free to call Jim for comment, analysis or background at (757) 641-3378. His writings on the economy and investments can be found at http://www.baycapitaladvice.com/publicity.asp.

About Jim Flinchum
Flinchum is the managing principal of the financial planning and investment company Bay Capital Advisors in Virginia Beach. His deep understanding of the financial world, national and global economics, and investing make him an outstanding Expert Resource for your articles. For more than 35 years he worked in senior-level positions for some of America's premier banking institutions, taught economics for the American Institute of Banking and the University of Texas, and served as a gubernatorial appointee to the State Depository Board.

Jim Flinchum contact
jim@baycapitaladvice.com, (757) 963-5699