Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you. Happy to be here.
Brandy Auterson-Hurst:
So when looking at the overall economy, what in particular stands out to you right now?
David Nelson:
Well, the big thing right now is not where the economy currently is or where it’s been, but rather what’s it going to look like as far as going forward. And our favorite tool we use is something called the Leading Economic Indicator, basically it blends several forward-looking data points into a single measure. So the chart that I brought along today … and I know it looks overwhelming, folks, but hang with me here and I’ll try to explain it to you, what it means. The blue line is that indicator and the yellow line is basically looking at a long-term trend. The data shows that historically the economy has grown at an average of 3.2% per year when the indicator is above the trend and a measly 0.7% when it’s below trend. As you can see in the right-hand side of the chart, the indicator has been above the trend line since basically the end of ’23. And last month’s reading basically is extremely strong, so we see no reason that the trend of this economic movement that we’re having right now can’t keep going.
Brandy Auterson-Hurst:
Okay. So what sort of implications does this have for investors?
David Nelson:
Well, I think the obvious answer is probably that this is a good thing and it’s going to be a good thing for stocks. It’s going to be a good thing for most financial assets. Bonds, it’s up in the air as far as depending on how things go. But clearly for risk, what we define as risk assets, this is probably good news.
Brandy Auterson-Hurst:
All right, David, thanks for your insight today.
David Nelson:
Thank you.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on OurGuadcities.com.
Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.