"In the 10 months from the first time unemployment hit 10% until it crossed back below 4.4%, the Dow and S&P gained a whopping 36% and 41% respectively (annual rates of 44% and 51%). [The] Unemployment [rate] is a lagging indicator so even though the rate increased, the economy was already recovering and stocks gained. Not surprisingly, some of the biggest gainers over the period were consumer discretionary stocks."
Why? Because the Fed prints a lot of money to make sure the economy has all the liquidity it need to grow and generate jobs. This is exactly what has been happening in this business cycle. And the stock market is driven by liquidity.
To find out more about my in depth views 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
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest
Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
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