Insights for Investors
By: Maurice Stouse, Financial Advisor and Branch Manager The new year has begun for America and the world and for investors. After watching both the stock and market experience significant drawdowns in 2022 (a rarity for the two to move in tandem), people wondered what the new year might bring. Thus far we have been showered by the media with talk of recession, stoking fear into the hearts and minds of consumers. Eventually, consumers begin to over worry and they begin to snap their wallets shut. This however does not seem to be the case, at least not yet. At this writing, while the economy has most definitely slowed, many companies continue to make money. 71% of companies reporting their Q4 earnings have surpassed expectations. We are left to wonder which is the greatest evil: A recession, inflation, or deflation. Inflation over time erodes the standard of living and is not sustainable. Deflation, we think, is the worst of outcomes as it is a collapse of demand and it eventually pulls the economy down, perhaps into a depression. We are reminded of a quote Ronald Reagan repeated more than once: A recession is when your neighbor loses his job, and a depression is when you lose yours. A recession is an economic reset and investors are reminded to take note that when the economy is seemingly at its worst, that is the time to invest in stocks if they are long term, growth oriented investors and have the tolerance for...
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