Advice in this article comes from AIA (Advocate for Absolute Returns”
The AIA “Advocate for Absolute Returns”
Association for Investor Awareness, Inc.
July 29, 2010
AIA reports that “After nearly six weeks of uncertainty, investors finally decided the outlook for the economy was improving enough to justify higher stock prices. Since our last newsletter in June, the Dow and the Nasdaq went up 3.4% and 2.1% respectively. Nearly all the gains came during the last two weeks.”
They say the recovery is still shaky with growth at only 2.5%, which means that it would not take much positive or negative news to push the economy over the edge either way. I report this information because just recently, I wondered if we are improving the economy and the dollar being more stable or are we still in trouble. According to this report by AIA, it appears that we are not yet on safe ground.
Although AIA reports that many industries are growing strongly, many others are still losing money. This observation suggests that people should still be careful in their investments and cautious in how they spend their money. It’s up to you and what you feel is the truth and how you choose to invest and spend your money.
The growth appears to be in multinational blue chips that do business overseas. Although the word is out that global economies are in trouble, there are some that look safe. Those countries are China, India, Southeast Asia, much of South America.
AIA claims the negative growth is in the housing industry, which is no surprise, even though this industry usually contributes about 10% of America’s GDP. “It isn’t just the developers and construction workers who are suffering. Banks, realtors, title companies, timber companies, furniture makers, and dozens of other enterprises are linked to home sales. Unfortunately, mortgages for home purchases fell to a 14 year low last month, which doesn’t bode well for the future,” says AIA.
Many manufacturers are still showing low profits. Although big exporters are doing well, smaller ones that primarily deal domestically are still having a hard time surviving. Part of the reason these domestic providers are having trouble is consumer confidence dropped again and so people who are normally big spenders are being tighter in their expenditures.
The bottom line here is that the economy is still very fickle. It can negatively or positively change at any time, according to how the consumer interprets the news. As long as consumer confidence does not improve and shoppers will not loosen up on their amount of their expenditures, it is safe to say that we are sitting on the edge of a cliff. Either we risk falling off or just sit there and observe the view for awhile.
Is a double dip still in the air? It appears that it is still a possibility if the news changes and worries consumers and investors. It’s up to you, but you may want to do what I am doing. I am taking small amounts of money and spending it on things from my store at Shop.OurDayShopping.Com.
I have a portable greenhouse, heirloom seeds that can be planted year after year or saved. I also got a two-way radio, and a heater in case power goes out or we need to relocate in an emergency. I also got other items I might need in an emergency, such as food and first aid. I even thought I might need a gas mask (as well as other types of masks) and iodine tablets in case of a dirty bomb. Now that’s me, you may not have the same goals, but I hope you will at least check into the store and see if there is anything that interests you.
If you have questions or need assistance, you can send me an email and leave a phone number that I can call. Write to Judith@OurDayShopping.com.
UPDATE 7/30/10
I just heard on the news that the economy is slowing because the consumer is saving more instead of spending. According to the news, this fact means that the economy is still doing okay. If people are saving instead of spending, it means that consumer confidence is still low. When they have more confidence then they will spend.
