Consumerism Drives Our Economy
Dine. Shop. Travel. Spend.
This is what drives our economy and increases the value of equity holdings (to over-simplify things a bit).
It is also what has been missing for the last year.
What happens when it returns?
Americans did the smart thing of saving the money they had, and the stimulus checks they received from the government over the last year.
But the economy, companies, and company earning expectations are such that those saved dollars will be unleashed as the country, not just Texas and Florida, opens back up.
Practically, it makes sense too, because people are wired to do things, go places, and interact with people.
Who knows if we’ll ever go back to “the way it was” or even if we should; but it does stand to reason that some kind of return to normal will happen.
As “normal” returns, it should boost the economy, markets, and company earnings.
That is a part of the near-term case for why equities go up from here.
No one knows and this is NOT in any way a prediction about the economy, markets, or what returns will be in the near-term.
It is reasonable that it can.
The question for you as an investor is are you positioned to benefit if it does?
AND, are you protected if it doesn’t?
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“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”
– Benjamin Graham