No one can predict the future but right now, starting the 3rd week of a new year, there is a tremendous amount of enthusiasm about the economic outlook for the United States going forward.  As indicated in my first article, “Blue Collar Jobs are Booming”, unemployment rates are down, long-term laid off workers are coming back into the economy and the equity markets are reflecting this optimism.  Stock prices are a prediction of future earnings and you can see what is happening to stock prices.  If an infrastructure bill is passed and signed, there may actually be a labor shortage.  Who would have thunk it after hearing about the new normal od 2% GDP growth and stagnant wages for the last 8 years.

And, since it is the 3rd week of the new year, I thought the article about losing weight was spot on for those of us constantly fighting the waist line battle.

I had an interesting conversation with a long-time friend and client of mine in Florida the other day whose grandson is thoroughly engrossed in what I was calling the cryptocurrency mania.  I may have to go back and rethink this strategy based on the article about cryptocurrency.  It appears that it is being accepted by various vendors just like US currency and credit cards.  Before the Federal Reserve was created, there were several forms of currency circulating in the US.  One of the benefits of multiple currencies was that banks had to compete for the deposits and, therefore, kept inflation low and the value of the currency high.  I’m not sure where this ends up but will keep you informed as best as I can.

With the Dow Jones Industrials fast approaching 26,000, the article about the index’s long road to 25,000 may have to be updated.  It is interesting to see how the Dow has been revised over the years.  I mentioned earlier, stock prices are an indicator of expected future earnings.  Again, not sure where this all goes but regardless, while it’s not guaranteed, should the markets drop dramatically and suddenly, the trading strategy being used in client portfolios is designed to recover most, if not all, the losses.  Because of this “insurance” strategy (again, non-guaranteed) I’m very comfortable staying fully invested.  Much more on this is the coming weeks and months.

Hope you have a super week!

Doug Alden

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