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Great Advice From Our Experts

Hanging On, But For How Long?

January 22nd, 2016

The economy is frightening on a nationwide and global scale. So far 2016 has not been very fiscally promising, and unfortunately there is not much light showing at the end of this tunnel. There are a multitude of problems effecting the global economy, such as the crash of China’s market and the end of the Iranian sanctions. However, there are a multitude of domestic problems which are being overshadowed. Maybe it is time to shed some light on America’s economy in this already troubling economic time.

Domestic equity markets are continuing to fall with the U.S. down 10% and the small cap indices down 20% its clear to see that these markets are completely in the bear phase (numbers as of January 15th 2016). What does this mean exactly though? Well there are many other developing problems in the U.S. markets. Falling commodities, over-valued equities, tepid consumer spending, stagnant wages, geopolitical concerns, low interest rates, crashing junk bonds and now falling stock prices are each alone reasons enough to concern yourself with. All of these concerns culminate into the tell-tale signs that we are in a recession.

 

If that isn’t reason enough, the fourth quarter of 2015 has been projected to yield a decrease of nearly 6%. If this happens, every quarter of 2015 would have reported a loss, that’s a year over year decrease. This can be blamed on the falling value of oil to about $30 per barrel, which doesn’t help considering the fact that the Iran sanctions are expected to drop anytime this month or in early 2016. This does not bode well for domestic oil producers seeing as though more surplus of oil is the last thing that the economy needs right now. Expect multiple bankruptcies in the near future, it’s going to be a rough ride.

Over all the economy crash of China may or may not have directly and heavily affected the United States market already, or we could still be waiting for the bulk of the damage. Either way there are enough concerns already domestically to prove that your money needs to not only be accounted for but safe as well. Contact David Ortiz, your registered investment advisor representative today, to make sure that you and your assets are protected.