Don't Count "U.S." Out
• Many investors have a “The U.S. is doomed,” mentality.
• Five often-overlooked forces should help push the U.S. economy forward.
The U.S. economy really is in pretty good shape. Manufacturing is bouncing back. The job market is sluggishly but surely improving. Inflation is low. Indeed, now that the chances of a return to the bad old days of 2008 are remote, it might be a good time to focus on investment portfolios to help ensure that they are equipped to seek the growth needed to fund big-picture things such as a child’s education or a secure retirement.
Yet, millions of Americans haven’t been able to focus on investing fundamentals—particularly when it comes to U.S. stocks. Instead, these people, regardless of their backgrounds, are fixated on the health of the United States itself. On every stop I make across the country, even after I talk about the U.S.’s current economic condition, I hear something along the lines of “This country is heading down the tubes.” There’s a whole swath of people that have written off the economic future of the U.S. because we’ve become a nation of unproductive senior citizens, or because we have too much debt, or because of our dysfunctional politics, or all of the above. That mentality also often puts a stop to any thoughts about investing in equities.
In my mind, however, there are powerful but frequently overlooked forces that can propel our nation forward economically. So what are these forces? They include favorable demographics, an innovative business culture, cheap energy and a manufacturing renaissance, a rebounding housing industry and a stabilizing debt picture. Individually, they are quite potent. Collectively, they form a multiyear dynamo that can push the nation forward to unprecedented economic highs. There are plenty of excellent, rational questions to think about when it comes to U.S. equities. “What’s their relative valuation to other assets?” “What’s my investment time horizon?” “How much volatility in returns am I willing to accept?” However, “The United States is doomed, why should I bother investing?” is not one of those questions. After reading this, I hope you’ll come to the same conclusion that I have: Don’t Count “U.S.” Out.
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