By David Fried, editor The Buyback Letter

The decidedly negative and skeptical view the mainstream financial press takes when virtually any financial news is released may be hurting, not helping us invest more wisely. 

There is good news in the financial markets, but often it is either not highlighted, or obscured by a myopic focus on a single week’s figures taken out of context.

No doubt many are still shell shocked by the economic and stock market events of 2008 and 2007. But going forward, we need to ensure we put the news in current context, rather than overweighting the past. As we know, driving using the rearview mirror as a guide can be dangerous. 

The mainstream financial media is currently casting a jaded eye on the good news in the financial markets. 

But before we overvalue history, we need to remember that nobody saw $145-a-barrel oil coming, and at the time, no one was even saying oil prices at that level were unsustainable.

A year ago the economy was shedding 600,000-700,000 jobs a month, while financial reporting was negative on the future of our economy. 

No one predicted that by year’s end, not only would job losses wane significantly, but by the first quarter of the next year, the economy would add jobs. This is what happens when everybody looks at the immediate past for future guidance.

Unfortunately, when this happens, some important news is overlooked. For example, did you know the Bureau of Labor Statistics reported in January that nonfarm business sector labor productivity increased at an 8.1% annual rate during the third quarter of 2009 -- the largest gain in productivity since the third quarter of 2003, and a 2.9% increase in output and a 4.8% decline in hours worked?

More importantly, the payroll losses which some thought would top a million a month at the height of the financial crisis last year have declined to under 200,000 jobs a month in September and October. 

More:  4,000 jobs were added in November and 85,000 jobs lost in December. These numbers are a far cry from predictions of the recent past. 

Conventional wisdom says the 5.7% gain in GDP -- the largest quarterly gain since 2003 –  is a fluke, and recovery will be weak. In fact, the stock market reacted by declining 3.5% in January. 

But we must view the January market decline against a backdrop of improving economic conditions. Last year at this time the stock market decline mirrored a continuing decline in economic conditions. 

The sky is not falling again. The market has come up about 60% from an exaggerated low last spring. We think additional corrections to the downside will be limited and won’t turn into a market meltdown. 

If you reflect on 2003 with its productivity and GDP gains of the magnitude we have just seen, you will see the market gained about 50% over the next four years. We think it would be unusual indeed for productivity and GDP gains to be followed by deteriorating financial conditions. 

Instead, we look for continued gains in employment, housing prices, productivity, and ultimately stock prices. Although these won’t all occur in a straight line, a year from now we should look back and see that something positive was beginning.

At that point, or some point thereafter, we will have to guard against once again looking in the rearview mirror and assuming that the improvement will go on forever. For now, we see a growing economy in 2010.

Meanwhile for those who follow our model portfolio, among our current recommendations are The Limited (NYSE: LTD), Philip Morris International (NYSE: PM) and Travelers (NYSE: TRV).

Learn more about his newsletter at The Buyback Report.

Editor's note: David Fried’s Pacific Palisades-based asset management firm -- Fried Asset Management, Inc. -- offers investor advisory and money management services. Mr. Fried can be reached at 310-459-9196.