I suppose it has something to do with the fact that Election Day is three weeks away and the hyper-political environment we now live in, but there’s this feeling out there that our economy is on the brink of disaster and investors somehow haven’t noticed. The evidence, as you will see below in numerous forms, does not support that point of view.
Certainly there are things to worry about: a national debt that is now 20% higher than all the good and services we produce each year, for instance. And I haven’t heard a workable idea from either political party in decades on how to solve the insolvency conundrum. What we do hear consistently is incumbents taking credit for the things that are working, and challengers trying to blame them for what isn’t.
Based on the years I’ve spent managing investments and paying attention to markets and the economy, it’s my opinion that politicians actually have very limited influence on either in the long run. As investors, we look for businesses that can successfully navigate the rules and regulations that the governing class impose on them. And if historical equity returns are any indication, those businesses collectively are doing a pretty decent job.
It's also my belief that government doesn’t create jobs – those businesses do – yet government policy does influence how many people get jobs, how many lose them, and how much of their paychecks get to keep. I don’t think presidents should get the blame for recessions, nor should they take the credit for economic recoveries, both of which are part of the normal business cycle. And in the end, I don’t feel that most of the unprecedented financial success that Americans have enjoyed has been because of government involvement, but in spite of it.
We can all disagree on what’s best for the country going forward – and how to fix the many problems we have – but at some point we need to look at the facts: America is doing very well economically right now, objectively and relatively. And it has less to do with who you voted for, and more with the decision you made years ago to get up and go to work every morning.
How can stocks do so well when the economy is so bad? Simple. American businesses – and the economy itself – are actually in good shape. (Reading time: 4 minutes)
The U.S. remains near the top of the world when it comes to prosperity – but other countries have also dramatically improved in recent decades. (Reading time: 3 minutes)
Recent hurricane devastation in the Southeast should remind the rest of us to better prepare for what could happen here. (Reading time: 4 minutes)
Probably more than you do, according to a new national estimate of $33,000. (Reading time: 4 minutes)
Whether you call it ‘reverse budgeting’ or the pay-yourself-first strategy – make yourself the priority every payday. (Reading time: 5 minutes)
The best time to lower the cost of college is before you even start looking for one. (Reading time: 6 minutes)
Boomers, Gen Xers, Millennials, and Gen Z agree on many basic investment principles – but differ starkly on how to implement them. (Reading time: 3 minutes)
Retiring in 2025? Here are five tips that could help you make better decisions when it comes to filing. (Reading time: 4 minutes)
You’ve got until December 31 to take your required minimum distribution – and it pays to do it right the first time. (Reading time: 5 minutes)
It’s easy to see our nation’s problems – and easy to forget what we’re doing really well. (Reading time: 9 minutes)
Words to the Wise
“America was not built on fear. America was built on courage, on imagination, and an unbeatable determination to do the job at hand.”
– Harry S Truman
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