By: Bill and Cindi Porter, AILERON INVESTMENT ADVISORS
Q: Is this a good time to invest in U.S. stocks? If so, why?
A: Most likely yes, but it depends on your specific situation. Regardless of one’s personal political preferences, for investors the recent presidential election was both decisive and possibly of major consequence. A pro-America, pro-business administration, calling for less governmental regulations and expenses may provide a positive environment for expanded economic development.
However, no government headed by either party or its philosophical agenda produces anything. Government can hinder but not create growth. Only American businesses create jobs as well as national, corporate, and individual wealth. And it is here that good news may offer a plus for our portfolios.
American worker productivity is on the rise and the government is now poised to create an atmosphere to further promote its expansion.1 When the total output produced by American workers expands, the economic pie is larger. As a result, we can have more slices, bigger slices, or both.
U.S. productivity has been on the decline for nearly 20 years.1 Now however, it appears that may reverse. Besides Artificial Intelligence (AI), technology, and robots, the Covid disruption caused the advent of remote work and major job shuffles. An inordinate number of workers were repositioned into jobs for which they were ultimately better suited and thus became more productive.2
Additionally, the recent explosion of new businesses has enhanced productivity by replacing many of the least efficient and uncompetitive companies.2 While there is always the possibility of a major unforeseen event which could sidetrack our economy, it does appear to be a promising time to invest in American stocks. Historically, the S&P 500 has been positive 73% of the time.3
A conversation with your trusted advisor can help you decide how best to invest for your future.
1https://www.economicstrategygroup.org/publication/in-brief-us-labor-productivity/
2https://www.barrons.com/articles/productivity-growth-economy-wages-technology-investment-25d70bef
3https://www.missionsq.org/prebuilt/apps/downloadDoc.asp
For more information about Aileron Investment Advisors visit www.investwithaia.com.
Investing involves risk, including the potential loss of principal. This is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.
