Economic Insights - May 2020

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What is the outlook for the economy?  We’ll give you the insights and analysis you need to make better decisions, so you can make better profits.

We’re living in extraordinary times. Combine the COVID19 crisis, with the emergent Sino-American Cold War and raging political Civil War and you have ‘Shockwave 2020.’  In such a situation it’s easy to panic because we’ve never had a crisis exactly like this one.  However, we know from the crisis surrounding the American Revolution, the Civil War, and World War II that the United States can rise to the occasion and come out even stronger. 

The collective wisdom of the market seems to be telling us that the worst of the recent crisis is behind us.  That doesn’t mean that unemployment has necessarily peaked or that growth has bottomed, but it does mean that we can see better days on the other side of the chasm.  More important for investors, the persistent ‘irrational fear’ pushed by the mainstream media and many political leaders will provide the proverbial ‘wall of worry’ that will keep the bull market from becoming a ‘speculative bubbles.’ 

Where has this insight taken us?

On March 22, we conducted a video Town Hall explaining that investors were caught in an irrational panic based on a misunderstanding of the pandemic’s implications.  We went on to show that everything from ‘historic precedents’ to ‘insider buying,’ to fiscal and monetary policy indicated that ‘a market bottom was at hand.’  Not unexpectedly, the S&P 500 index bottomed the very next day and, through June 1, it rose roughly 34 percent.  We also explained that focusing on the stocks of companies addressing key trends driving the economic evolution could deliver a much bigger ‘bang’ during the expected recovery.  Specifically, the PARE-5 strategy used by the Business Briefings editors rose more than 66 percent over that same period to a new all-time high!  (While it is not suitable for everyone, a number of your fellow Business Briefings subscribers have adopted PARE-5 as part of their financial plans.  If you’d like to find out more about it, call 312-706-6850.)

We’re expecting a period of consolidation in June.  Then, the S&P...

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