What are the potential implications for consumer-sector stocks?
At the margin, we think the impact of increased regulation and taxation on financial services companies could be negative — particularly for businesses that touch the consumer directly, such as credit card companies. Anything that slows economic growth, increases uncertainty, or decreases confidence is negative.

What are your thoughts on a consumer financial protection bureau to regulate for credit-card and mortgage-lending abuses?
We hope that there will be some longer-term benefits to the economy. Consumers are very smart, and over time they gain a solid understanding of how rules and regulations make things easier or harder for them, and whether or not something will cost them more or less. In fact, it is possible that the recent economic soft patch is caused, in part, by the increased uncertainty and doubt that consumers have about the economy and their access to capital. Fortunately, given the recent declines in the market, stocks across many consumer sub-sectors are now very attractively priced and may offer above-average rates of return going forward.

The reform calls for changes to debit-card interchange fees. What does this mean for retailers?
The Fed is reviewing the current level of interchange rates that are charged to retailers. It is possible that these rates will be lowered by as much as 30% to 50%. Over time, research has shown that these savings are not passed along to the end consumers. It could be a benefit to margins for retailers over time, which would be a positive for investors in retail stocks. Of course, as with any significant legislation, the Dodd-Frank bill may also bring about unintended consequences, which we always try to consider and anticipate.