Are we simply applying a pain killer to a wound that requires significant care? Is this market healthy? Are we in the middle of a storm or the tail end? Will the debt situation that we are now bridled translate into economic strength or weakness? Can the fed move in a manner that will sop up excess cash in the market and stave off inflation? Is inflation with this debt picture bad? Is social security done? Will my medical expenses be covered? Is my home eligible for loan modification? Can I borrow in this environment?
These questions plague every investor. The last 2 years have defined an investment environment unlike any other seen before. Arguably this is significantly similar to the great depression. Like the Great Depression, this economic downturn is symptomatic of larger issues with the financial system. And much like the Great Depression the individual investor must be confident and return as a consumer in order to drag us through this downturn. The recent market upswing has certainly created buoyancy and added some verve to Main Street and Wall Street alike. But to most something is missing…
Is it the massive consumption of the last 10 years? It might be. The new norm, as many have tagged this environment, suggest a new acceptance of “what is”…maybe less pay and less vanity in conjunction with higher living costs will prevail as the new norm.
However history has seen this exact scenario. History also shows us that different choices will result in vastly different outcomes. The recipe for success may be rooted in the actions to stimulate growth and fuel the next great economy. The question that exists - What stimulates growth?
The actions of our government and treasury will be watched carefully. Each word scrutinized to the point of “over dissection”. To the individual investor-“hang on it will be a ride..”