3 Ways To Invest In Stocks (Even When The Ride Is Coming To An End)

On the flip side, consumers have rarely been as pessimistic about the economic future. The difference between present-day circumstances and future expectations are nearly as bleak as they were leading into the 2001 recession. They are even starker than they were leading into the Great Recession of 2008.

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Businesses are already glum. A broad measure of job gains in a survey by the National Association for Business Economics (NABE) is at its lowest level since 2012. Meanwhile, according to Jon Hill at BMO Capital, CEO confidence hasn’t been this low without the economy entering recession or already mired in one.

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Small companies may be struggling the most. The proportion of non-earners within the Russell 2000 is getting closer and closer to 30%. Jill Carey Hall at Bank of America Merrill Lynch points out that these levels are usually seen during economic downturns.

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Of course, none of the troubling specifics imply immediate doom for stocks, corporate bonds, real estate or other risk assets. Chairman of the Fed, Jay Powell, has been keeping the asset price dream alive with three consecutive rate cuts and $60B-plus in monthly treasury bill purchases — a quantitative easing (QE) elixir where the electronic dollar credits eventually find their way into riskier investments.

Think about it. Not only is the FFR stimulus as accommodating as it was during the 2001 recession as well as the Great Recession in 2008, but the Fed’s balance sheet is now back above $4 trillion. (They just keep right on cranking the electronic money printing press!)

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Perhaps ironically, capital spending at corporations continues to weaken and earnings continue to slide. It follows that wildly optimistic earnings estimates for 2020 will need to be slashed, pressuring valuations. And those valuations are already pricey.

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ETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser ...

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