CFO Focus: Tailspin or economic growth ahead?

This economist doesn’t foresee catastrophe in the near term.

With the gross domestic product growth rate currently at 2.1% and unemployment at 3.6%, economists and presidential election prognosticators are wondering if the economy, particularly the stock market, will continue to grow. Or, are we headed for a bubble that might burst, sending the economy into a tailspin?

Indicators suggest there is room for further growth and a catastrophe is unlikely, at least not immediately. On the other hand, individual investors and the general public may not be feeling the love that has benefited big business. Here’s why:

  1. The top 10%, the wealthy, owned 81% of all stocks and only 54% of families owned stock, either directly or indirectly as part of a fund and/or 401K plan.
  2. There was a small correction of the stock market at the end of 2018 that led many investors to withdraw money from the market in early 2019. Because there was a quick recovery, many did not have the chance to get back in.

 

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