Macroeconomic factors impacting investment in the US Version 1.3
??? Is the trade war a force, or simply an accelerator of existing forces???
http://money.cnn.com/2018/05/20/investing/stocks-week-ahead-buybacks-tax-cuts/index.html
1a) Money on the sidelines may be better invested after a correction or recession:
https://www.marketwatch.com/story/ask-yourself-this-simple-but-critical-question-before-you-buy-into-this-stock-market-2018-05-21
1b) 7/5/18 the move to cash is growing: https://www.cnbc.com/2018/06/28/3-ways-younger-wealth-is-diverging-from-an-older-approach-to-market.html
2) 200 years of interest rates show they are very low compared to history and have been for an unprecedented length of time:
https://www.cnbc.com/2016/11/17/200-years-of-us-interest-rates-on-one-chart.html
3) Aging demographic, as the baby boomers age, they will rapidly need services and care from younger persons almost certainly going through economic change:
https://news.aetna.com/2017/10/ticking-time-bomb-aging-population/
3a) There is a class of retirees that are wealthy:
https://www.washingtonpost.com/news/get-there/wp/2018/05/21/the-number-of-401k-millionaires-hits-a-new-high/?utm_term=.87110615c314
4) Depending on the source you use, consumer debt is at an all time high, or is about to be:
https://www.cnbc.com/2018/02/13/total-us-household-debt-soars-to-record-above-13-trillion.html
5) Corporate debt is also at a high level:
http://money.cnn.com/2018/02/26/investing/corporate-debt-rising-rates/index.html
6) US debt ratio to GDP is 105.4%, average is 61%, all time high 118.9 in 1946, all time low 31.70% in 1981:
https://tradingeconomics.com/united-states/government-debt-to-gdp
7) High number of created jobs, and we are starting wage increase:
https://www.bloomberg.com/news/articles/2018-02-02/u-s-added-200-000-jobs-in-january-wages-rise-most-since-2009
7a) However, medical care, child care, college tuition, college text books and most significantly, hospital services rose at a faster rate than wages:
https://www.marketwatch.com/story/this-chart-shows-the-modern-equivalent-of-bread-and-circuses-to-sate-the-masses-2018-02-12?link=sfmw_fb
7b) Certain jobs will be largely automated in 10 years, retail sales, fast food, are expected to the the largest categories, (retail sales is the largest job category today):
http://www.visualcapitalist.com/visualizing-jobs-lost-automation/
7c) Shipping costs are going up, this will increase the cost of about everything:
https://www.washingtonpost.com/news/wonk/wp/2018/05/21/america-doesnt-have-enough-truckers-and-its-starting-to-cause-prices-of-about-everything-to-rise/?utm_term=.0a8d8e423a2d
7c) Gilded age 2, the number of people squeezing to the bottom of the middle class is increasing:
http://money.cnn.com/2018/05/17/news/economy/us-middle-class-basics-study/index.html
https://www.washingtonpost.com/news/wonk/wp/2018/05/25/the-alarming-statistics-that-show-the-u-s-economy-isnt-as-good-as-it-seems/?utm_term=.805d0caa399b
8) Not a surprise, there are some indicators of inflation. The current stance of the Fed is to let it begin, (probably to avoid stagflation):
https://www.cnbc.com/2018/05/23/fed-indicates-it-will-let-inflation-run-above-2-percent-goal-for-temporary-period.html
9) China's bond market, which is only slightly open to foreign investment has been suffering defaults. China is working to shore up this area of their economy: https://www.reuters.com/article/us-investment-mutualfunds-lipper/u-s-money-market-funds-see-biggest-inflows-in-nearly-five-years-lipper-idUSKCN1J32X2
Microeconomic factors worth considering
Climate change will impact coastal areas. Upper middle class tend to have first and second homes in these zones. In some percent of cases this will reduce their net worth:
https://www.theguardian.com/environment/2017/aug/29/hurricane-harvey-climate-change-real-estate-florida
Foreign money pouring into Miami, perhaps the hardest hit high end US market by rising sea levels. The main point of the article, they think they can get out in time:
https://www.npr.org/2018/05/21/611919853/foreign-investors-shrug-off-miamis-rising-sea-levels
Pressure on the Euro continues in increase:
https://www.washingtonpost.com/news/wonk/wp/2018/05/21/italys-new-populist-government-really-might-blow-up-the-euro/?utm_term=.42fb0438854c
