Enjoying the Summer and Beating the Heat
Tuesday, August 02, 2016
I am more of a summer day fan than a good winter day. Enjoying the water, golf, and sunshine always seems to improve my mood.
My wife and I recently enjoyed a nice, long weekend on Mackinac Island with a few friends. We spent two nights on the island and had a great time biking, eating, and enjoying a few beverages with some great weather. If you have never enjoyed spending a night on the island, I would suggest you add it to your bucket list.
The other take away I had after leaving the island was that there was no shortage of people out spending money and enjoying themselves just like me. On top of that it was a very diverse crowd. There were groups of Amish, Indians, Filipinos, and every other ethnicity you can think of all spending money and enjoying themselves.
It was the direct opposite of what we seem to hear every day from the news media about how bad things are in our country.
A few weeks we heard how bad it was going to be because of the "Brexit" vote and a global recession would soon be upon us. Then last Friday the equity markets hit an all time high and several economic indicators have been released. Here are just a few of the statistics that were released. The ISM Manufacturing index1 rose to 53.2 in June from 51.3 in May while the ISM Service index2 rose to 56.5 from 52.93. Worker pay is accelerating; average hourly earnings are up 2.6-percent from a year ago, which is a 30-percent acceleration in the growth rate from the 2.0-percent growth rate during the year ending in June 20154. Retail sales excluding volatile components like autos, building materials, and gas, are up 4.3-percent from a year ago and have risen in 15 of the last 16 months5. I thought I heard the consumer was dead and spending any money6.
There are many other indicators that have been released including home building and existing home sales. You just need to look around where you live to realize that new homes are going up and existing homes are being sold.
Those numbers and activity seem to support what I observed on the island; many people are feeling confident in their financial position and are out enjoying the fruits of their hard labor. Don't get me wrong, there are certainly many individuals being left behind in this economy and the reality is some very difficult structural issues are the cause of that in regards to education and how technology has changed many jobs.
My suggestion is that you enjoy the summer and the great weather we have been experiencing. I live in Southwest Michigan and we only get a couple of months each year of this type of weather. Take advantage of it and enjoy it. Ignore the political conventions, the ups and downs of the markets as we enter the dog days of summer, and get out and spend time with your family.
If you are worried about the markets and your investments, call your advisor for a checkup and review your short- and long-term goals. If a change is needed then make it.
1 The ISM Manufacturing Index monitors employment, production, inventories, new orders and supplier deliveries
2 The ISM Services Index is comprised of 4 components and tries to measure if the overall service sector is contracting, staying the same, or expanding.
3 Bureau of Economic Analysis
4 Bureau of Labor Statistics
5 Haver Analytics
6 The opinions expressed are subject to change with economic and market conditions. They are not meant as investment advice. Forward looking statements and market forecasts cannot be guaranteed and may not come to pass.