“It was the best of times, it was the worst of times.” Charles Dickens
A Tale of Two Cities is the classic Dickens novel and other than location, Paris, and time, French Revolution, one might see some of the same stories and headlines (politics, collusion, liquor, and family secrets) in today’s news. What one might call it a Tale of Two Stories. Many in the media, and elsewhere, keep insisting that a recession and market crash is imminent. If they say it long enough eventually they will be right, and they will raise their glasses and voices to celebrate how smart they are. In the meantime, the market and US economy continue to grow. Markets are at or near all time highs, GDP the biggest overall measure of the US economy has been plodding along at 2% growth for the past 8 years. That is slow steady growth. Now we are looking at what was 2.8% GDP growth in 2017 and is trending toward 3.5% GDP growth in 2018. Those are good numbers folks.
Now they won't last forever, markets and economies do tend to run in a cyclical pattern, however how long each of those cycles run is often independent of the cycle previous. Conditions change. We have reduced corporate taxes, and increased productivity and innovation. That is like going from regular fuel to racing fuel in an already moving vehicle. It just got better. And while it can not run forever, market downturns and recessions will happen, the data continues to support another 12+ months of likely growth.
Don’t invest based on this potential growth however. Invest based on your needs, your timeline, and your goals. As I told a group of Realtors recently there are more than 5 models of homes, because we expect a home to fit our lives at the time, likewise there are more than 5 investment models which has become all too standard in the financial industry. Your financial picture should be reflective of your needs just as your house reflects you. Have a great week.