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Monthly Insights: Could This Be Nirvana?

APA Jones 3x4HI RGBU.S. stock markets are hitting new all-time highs, the unemployment rate is at record lows, GDP is growing, wages are increasing, interest rates are low. Described this way this idyllic state sounds too good to be true. On the surface, things appear good. Underneath, there is a lot more to it. Stocks may be at all-time highs, but they are also trading at above average valuations. Unemployment may be low, but there are still plenty without jobs -or good paying jobs to be more specific. GDP is growing, but the growth rate is slowing. Wages are increasing, but not much more than prices are increasing. Interest rates are low, but they are low for a reason! This idyllic state may last, but under the surface cracks are forming - and have been for a while. 

The story can be written any way you want. Our job is not to put a spin on the facts, but to let the facts speak for themselves. Ten years into this economic expansion, the numbers are still good. What has us concerned is not where they are today, but where they go from here, as the recent trajectory has been lower. 

There has never been a time without anything to worry about. Today is no different. In the always-on news cycle of today we are constantly bombarded with things we should be worrying about. Some are worthy of worry, others maybe not. More important than if we should worry about something, is when we should worry about it. After all, most of the things we worry about in life never actually come to fruition. And, sometimes when they do happen, circumstances have changed so much along the way that what we thought we should worry about is actually not such a big deal.

We are constantly faced with these challenges through life -and certainly when it comes to our financial decisions. The less clarity we have, the more we tend to worry. Of the endless list of things to worry about, what rises to the level of immediate concern? What is worthy of action and what is not? What impacts our lives? And, what rises to the level of impacting our plans?

Today’s environment is no different. There is a very long list of completely justifiable concerns. In fact, I think about them and talk about them on a daily basis. And yet, markets keep moving higher, the economy keeps growing, and the world keeps advancing. Humans are prewired to think about the things that will change our status quo, whether negatively or positively. That’s why we’ve evolved and advanced throughout time. However, strengths can also be weaknesses if not used properly. 

As we enter 2020, here are some major concerns: What will the election bring? Will trade conflicts subside or amplify? Will the economy slow enough to the point of recession? Will geopolitical conflict spike? The list goes on and on -and we aren’t talking about minor issues. While these are all legitimate concerns. Harder to understand is if any or all will become an issue worth reacting to. More often than not, they are not. 

In the midst of all the ever-present concerns it is important to keep your long-term plan in perspective. We must not only focus on our concerns for today, but also on our plans for the future. This is sometimes challenging but is the basis for a successful plan. It is what the team at Allegiant always tries to keep front-of-mind as we help you navigate your financial path. 

If you would like to view data and charts about the economy and various financial markets, please scroll down to see this month's Economic Dashboard or click here to browse our Monthly Insights book.

Benjamin W. Jones, CFP®, AIF®
President, Chief Investment Officer, Principal

AllegiantPA Economic Dashboard Portrait January 2020

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