Let's not forget a simple idea. Profits drive the economy. Higher profits encourage business to hire and foreign investors to bring their money in our country.
The above chart (click on the chart to enlarge it) shows that rising or declining profits lead to higher or lower production.
One more concept. Profits peaked in 2004. This is the time when the dollar went into its recent multi year slide. The dollar, like interest rates, is an important fever chart of the economy. It is not enough to say "we want a strong dollar." We have to earn it!
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
George Dagnino, PhD
Editor, since 1977
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