BellaOnline Forums Money Investing What Do You Think About the US Economy?

I'd like to hear everyone's thoughts about Friday's rise in the unemployment rate, the Friday plunge in the stock market and the US dollar, and the huge rise Friday in oil, natural gas, gold, and other commodities. Or just your thoughts in general on the US economy.

Well yesterday was a fantastic day in the stock market only to be followed by a outrageously low dow today. That seems to be the trend lately with the stock market...one good day followed by 7 or 8 bad. That seems to be a rocky way of increasing the value of retirement funds.

As for the price of oil, it's going to keep going up because there is less oil than there is demand. With the housing market taking a nose dive, unemployment rate increasing and food prices going up I think we are in a horrible recession NOW. I don't see recovery from it in the very near future. Maybe there is some hope if we get a democrat in office.

I agree with pretty much everything you said. The only additional point I'd like to make is on your comment on the stock market. You said that it was the trend lately(up & down). Actually it has been the trend for the last decade. Check out my article on investing in overseas markets for some info on that. Investing some money overseas will do much more for people's retirement accounts that keeping everything here in the US.

Thanks, Tony, I will check out your article.

There are too many problems in the economy for there to be a quick fix and the infusion of cash and a lower interest rate is a little too little too late.

1. Too many foreclosures
2. Credit is tight which results in less spending
3. Large Sectors of the Economy are tightening their belts
4. High fuel prices
5. Increase in transportation costs
6. High flour prices 400% increase
7. Higher corn prices
8. Increased unemployment
9. Depreciated dollar
10. Large Trade Deficit with China

To name 10 problems with the US economy. Some sectors are really well and offset what is wrong with the economy.

You're right,there is no quick and easy fix. You hit the nail on the head with many of the problems you mentioned. One of my main themes is the depreciating dollar and the rising commodity prices-food,energy,etc.

Tony - I read your article. It was very informative. Not to change the subject, but since you said not to keep everything here in the U.S., what percentage of one's portfolio do you usually recommend that people invest in the foreign market?

Hi Deb,

It's really going to vary depending on a person's risk profile, age, etc. I'd say an absolute minimum of 20% in foreign securities. But I have seen people with up to 70% overseas.

But that 20% could include very conservative investments like foreign govt bonds similar to our Treasury bonds along with foreign stocks. And a person could play it safer and not buy individual stocks or bonds but a broad basket thru mutual funds or better yet ETFs.

I will be writing an article soon on the most successful large institutional investors in the world- the college endowment funds of Harvard and Yale. They have averaged over 20% returns each year for over 20 years. How have they done that? By having relatively small exposure to US stocks and large exposure to foreign stocks, commodities like oil,etc. and offbeat real estate like farmland and forest lands.

Thanks Tony. 20% is a figure that is much more liberal than I've worked with in the past. I've gone as high as 10%, but tend to be more conservative (5%). When you talk about the sinking U.S. dollar and the U.S. economy it only makes sense that if you want to increase your retirement fund you need to invest a greater portion of your portfolio in overseas stock. Fidelity Investment Mutual Funds are the primary point of interest right now. Fidelity Latin America stock is a good one as far as I'm concerned. Thanks for taking the time to respond with such an indepth response. I really appreciate it.

Oh, and although it's a late welcome, welcome to Bella Online as a new Editor as well.

Not that I like Wal Mart -- but as it is an anti cyclical stock and the latest reports are positive, above expectations, it may be wise to look at it.

Tony, I like India for foreign, what's your opinion on India and China as foreign holdings?

Hi,
Walmart is one of the better acting US stocks but I'd still rather avoid companies related to what US consumers are doing.

I do like both China & India for overseas holdings. I like China a bit more because the stocks are somewhat cheaper but both are great areas to invest into.

Hi Deb,

Your 5%-10% is way too low but as I said in my article 90%+ of Americans invest too little overseas.
I like that you're investing in Latin America! The only thing to watch out for in that Fidelty fund is how much of the fund is invested in Mexico. Investing in Mexico is like investing in the US--ever since the NAFTA trade deal,their economies move in sync.

Thanks Tony.

They do little to stimulate the economy but alot to hurt it. Illegal supporters like to claim that they do all the hard work like picking tomatoes. Actually only 3% - 6% work in the fields. Any job an illegal can do so can a legal immigrant


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That was a great summary! I agree with you.

US economy is getting better now. The economy will be a lot better in 2010.

As for the price of oil, it's going to keep going up because there is less oil than there is demand. With the housing market taking a nose dive, unemployment rate increasing and food prices going up I think we are in a horrible recession NOW. I don't see recovery from it in the very near future. Maybe there is some hope if we get a democrat in office.

Hello,

I absolutely love both China and India (China a bit more). That is where economic growth is happening and will continue. Both countries have a massive population which is moving into the "middle class".

By the way, I agree with you about Walmart being anti-cyclical although I do like stocks like McDonald's, Pepsi, Coke more as anti-cyclical stocks.

thanks, US Economy is too good...........

I think things are finally starting to get into a general upward trend. We've had a rough few past years, but I think things are starting to get better.