We have much to be grateful for even though we continue to live through an anxious investing environment. Certainly we need to be mindful of the difficult challenges stressed in today’s headlines, but we should not let attention-getting headlines overstate economic problems, nor should we let capital market volatility obscure the opportunity for attractive returns over time.
In today’s headlines, we see messages that tell us that: Europe lacks meaningful growth and has too much debt; we have a dysfunctional federal government; unemployment is too high; and there is dissatisfaction with the uneven distribution of reward in our economic system. We are also told China is slowing and may not achieve a soft landing.
But, these headlines do not provide the American context. Unlike Europe, we have one government and a single currency. Also, 90% of Americans have jobs and 90% are current on their credit cards1. The vast majority of us take on debt we can afford, live within our means and work hard to sustain ourselves and our families. Our economy is growing at more than 2.0% and remains the most innovative in the world, as illustrated by companies like Apple. Lastly, on a global basis, we are living in the most robust period of wealth creation and poverty elimination in history2. It is in this context most of us go about our daily lives.
All modern economies seek economic growth. Economic growth means the increased production of goods and services. Increased production leads to greater profitability. Greater profitability leads to more jobs, higher incomes, more investment in plant and equipment, and increased returns to investors.
In my remarks, I will take a look at the following topics and create context for some of the headlines seen during the recent months:
- Identify the headwinds and tailwinds that effect U.S. economic growth.
- Discuss how in the current environment, investors can best gain the investment experience they seek.
- Share observations about what is right about America, despite some troublesome headlines.
For a PDF trascript of the above video, click here.
1 Zachary Karabell, The Daily Beast
2 Bureau of Economic Analysis