Focus on the Bigger Picture – Economic Indicators Signal Rebound

Focus on the Bigger Picture – Economic Indicators Signal Rebound

Don’t start selling your hard-won investments in a panic. The U.S. economy is recovering slowly but surely.

Fear and anxiety, rather than any real deterioration in the economy, is driving market volatility. Investors have overreacted to the downgrade in the U.S.credit rating, ongoing U.S. fiscal problems, and some weak economic data.

Look at the economic indicators-including payrolls, unemployment claims, auto sales, the money supply, retail sales, housing starts, mortgage rates, housing affordability, and oil prices-all are on the upswing.

In addition, corporate revenues soared 13.2% in the second quarter, and economic growth is continuing in emerging markets such as China, Asia, Latin America, and the Middle East. That is fueling strong U.S. corporate earnings. Moreover, the Index of Leading Economic Indicators turned upward at the end of June and points to slowly expanding economic activity.

Take this opportunity to rebalance your portfolio by purchasing assets at reduced prices. It’s an opportune time to consider selling fixed-income assets and buying stocks that have slumped, as long as doing that fits your individual goals,  time horizon, and the level of risk you are comfortable with.

The recovery will take time, but it’s under way. So, don’t sell in a panic, and don’t just ride out the hysteria. Adjust your portfolio to take advantage of market turmoil by keeping focused on the bigger picture

Copyright Ian Hurwitz 2011 “Focus on the Bigger Picture – Economic Indicators Signal Rebound“

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