I had the distinct pleasure of sitting in on a 3 ½ hour presentation by an economist. I know you are thinking “Really, that much time with an economist would put me to sleep!” Quite the contrary. Brian Beaulieu was the captivating speaker and he has a new book out called Prosperity in the Age of Decline.
I heard Brian speak back in 2006 and he then called the 2nd Quarter of 2008 as the start of a recession. He was spot on and his company has a 94.7% accuracy rate on their economic predictions. He says things look pretty good now through 2017. Then it is time to keep your eyes open going into 2018 – there will be a slowing of the GDP and another economic downturn coming our way in 2019. It won’t be as bad as the 2008 recession, but will look more like what we saw in the early 1980’s and early 1990’s.
He went on to say that if you are under the age of 45 “It sucks to be you!” There is a severe depression coming somewhere between 2030 and 2040. But don’t focus on that right now – the next few years should be prosperous. The United States is still the engine driving the world’s economy. The US is estimated to add 100 million people over the next 30 years suggesting that middle income America is alive and well.
All of that translates out to say that we should be investing in our companies and betting on the 1-3 year horizon. The stock market is poised for a correction, but that should not deter owners from investing and expanding their businesses. The consumption of goods and services will continue to increase and interest rates should remain relatively low. That all sounds like good news to me!