Lisa Gray has been a wealth writer since 2001. She has been involved in the wealth management industry since 1988. She is the author of two bestselling books—The New Family Office and Generational Wealth Management.| If You're Looking For Positive Economic Talking Points You Can Use With Your Clients, Here Are Three Big Ones |
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| Tuesday, July 10, 2012 13:01 |
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If you’re searching for positive talking points on the US and global economies to use with your clients, here are some thoughts for you. We all know that gross domestic product (GDP) is driven by consumer spending. That’s responsible for 70% of GDP. The things that lie behind consumer spending are a) job creation and b) housing. Starting from the bottom up will show you some clear potential for growth.
This Website Is For Financial Professionals OnlyThe fact is that, five years after the mortgage crisis gutted the entire market, housing prices are going up. Major sales-price indexes indicate that this is a nationwide phenomenon, although the rate of increases varies from region to region. If you take out foreclosures and distressed sales, the pricing picture for housing is even brighter.
So it’s reasonable to conclude that the overhang from foreclosures and distressed sales is providing a drag on the housing market. Improvement in the housing sector means the employment picture will improve. And even thought the jobs numbers have disappointed of late, they are still going up.
Jobs are the source of discretionary income for consumers. So, if the housing market is improving and the employment picture is still positive—although not as positive as we’d like it—there’s reasonable basis for thinking the economic recovery is still alive, it’s just being held back by external forces like Europe and the potential fiscal cliff the US is facing.
So what do we watch for? Two things could throw this scenario out on its proverbial ear. The employment picture could reverse trend and go negative. And if the crisis in Europe continues to worsen, housing prices could also reverse.
These are real possibilities since the Eurozone still, even after its progress at the European Summit, is only addressing symptoms, not the underlying fiscal issues of its member countries. But for now, we’ll take what we have. And that’s an improving housing market and an improving employment picture.
If these trends continue, even at a slow pace, there’s a great deal more positive news than the short term negatives would lead us to believe. These talking points can offer your clients solid hope within what looks like a very negative environment.
They can also help your clients navigate the investment landscape successfully, whichever scenario actually comes to be. To add even more clout to these talking points, go back and listen to the July 6 webinar with Fritz Meyer.
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