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 John Nelson, financial planner at NelsonCorp Wealth Management. Welcome back, John.
John Nelson:
Thank you for having me, Brandy.
Brandy Auterson-Hurst:
So what are you looking at when it comes to the economy right now?
John Nelson:
Yeah, if you look at the high level, broad indicators, things like GDP, consumer spending, pretty optimistic, positive signals that we’re seeing in the economy right now. If you drill down a little bit further, there are some pockets and areas of concern that we focus in on, and one of them is the chart that I brought with me today. Being in the Midwest, the Chicago Business PMI report is one. It’s a tool that acts as a bit of a barometer for us on regional manufacturing activity. So it’s a nice tool that helps us track things like new orders, hiring, production, all for real businesses here in the US.
And although you can see on the line that we’ve worked our way up, the last couple of months have been better than the past, we’re still below, at that 47.1, we’re below that 50 mark that gives us an indication whether we’re in an expansion or a contraction. And one surprising statistic that we have noted there, it’s 20th consecutive month of contraction. So this is just one tool, but a little area of concern that we’re focused in on.
Brandy Auterson-Hurst:
Okay. So what should investors take away from this?
John Nelson:
Yeah, I’d say areas that are dependent on strong economic activity. I’ll say, for example, small caps, smaller companies, I wouldn’t be probably leaning too heavily that direction just given the overall dynamics. But as we always say, this is one of literally thousands of indicators. So making sure that people are reviewing the risks associated with all investments in retirement accounts and investment accounts would be the key.
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.