An up and down week in the market resulted in almost no change despite the fact that the market is flirting with new all-time highs.
The US economy grew by half what most economists were expecting in the second quarter, a tepid 1.2% pace. This is following the first quarter’s dismal 0.8%. The primary driver of the slow growth is the largest drop in business investment since the end of the Great Recession.
Businesses also are saying that they are not planning on ramping up investments in their growth. It appears they want to take a wait and see attitude until after the presidential elections. As we have reported to you in previous emails and podcasts, the market does not like uncertainty. The fact that Hillary Clinton and Donald Trump are essentially tied in the polls means that there is a possibility that Donald Trump could become president.
The market does not like change or uncertainty, and no one can argue that Donald Trump would represent a lot of change. Hillary Clinton, on the other hand, would represent more of the same. Businesses will be reluctant to make investments until they have a better idea of who is going to be the president and what that president’s policies are going to be.
Do you feel that this market is a giant house of cards? Do you worry that our country is getting deeper and deeper into debt and that it will not end well? Do you question why this market is at all-time highs when almost all of the economic signs tell us that things are headed in the wrong direction?
If you said yes to any of those questions, then we think alike. It is why I believe that you must always be prepared for the worst. You can hope for the best, but you must always prepare for the worst.
-Ken Moraif
The US economy grew by half what most economists were expecting in the second quarter, a tepid 1.2% pace. This is following the first quarter’s dismal 0.8%. The primary driver of the slow growth is the largest drop in business investment since the end of the Great Recession.
Businesses also are saying that they are not planning on ramping up investments in their growth. It appears they want to take a wait and see attitude until after the presidential elections. As we have reported to you in previous emails and podcasts, the market does not like uncertainty. The fact that Hillary Clinton and Donald Trump are essentially tied in the polls means that there is a possibility that Donald Trump could become president.
The market does not like change or uncertainty, and no one can argue that Donald Trump would represent a lot of change. Hillary Clinton, on the other hand, would represent more of the same. Businesses will be reluctant to make investments until they have a better idea of who is going to be the president and what that president’s policies are going to be.
Do you feel that this market is a giant house of cards? Do you worry that our country is getting deeper and deeper into debt and that it will not end well? Do you question why this market is at all-time highs when almost all of the economic signs tell us that things are headed in the wrong direction?
If you said yes to any of those questions, then we think alike. It is why I believe that you must always be prepared for the worst. You can hope for the best, but you must always prepare for the worst.
-Ken Moraif