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Seven Burning Questions for Investors and Fund Managers

Big issues we'll learn about at the Morningstar Investment Conference.

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Last year, the economy hacked a path into uncharted territory. We'd never seen a financial meltdown like this one and the market meltdown and government response took us a long way from where we'd ever been. Today things feel a lot better than in the winter, but we still don't have much visibility as we hack our way through the jungle. With that in mind, I'll outline seven burning issues that will tell the tale of where we go next.

When some of the best investing minds gather at Morningstar's annual investment conference May 27-29 in Chicago, these issues will be front and center. I expect a fierce debate from all quarters and I think this year's lineup is our best ever.

1. How Will the Great Unwind Work? 
In cartoons, characters get hit with a frying pan, shake it off, and their faces go back to normal. This recession is not like that. Although past recessions may have worked that way, we've got years of hangover ahead of us with this one. Maybe the hardest part to predict is how the government will unwind its foray into the private sector and how the economy will react. The Fed has bought $300 billion in Treasuries and $750 billion in mortgage-backed securities and could buy more. How do they start to unwind those positions without crushing the market? How does the government start to sell off its banks, insurers, and automaker holdings in an orderly way? What will become of Fannie and Freddie? That's a lot to sort out and it's going to have a huge impact on the economy and the markets.

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Russel Kinnel has a position in the following securities mentioned above: SLADX, PTTRX, DODFX. Find out about Morningstar’s editorial policies.