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Goldman Sachs and Balance of Risks: 'Somewhat Less Positive'

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Part 4
Goldman Sachs and Balance of Risks: 'Somewhat Less Positive' PART 4 OF 4

How Are Investments Doing in the United States?

Investments in the United States

In the past few months, many fund managers have changed their stances on the US economy. The improvement in US economic indicators and President Donald Trump’s proposed changes have been creating an optimistic view of the US economy (SPY) (QQQ).

How Are Investments Doing in the United States?

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Janus Capital’s Bill Gross said on January 20, 2017, Trump’s inauguration day, that there will be more investing during this presidency. Earlier, companies used free cash flow for dividends and share buybacks. Gross believes companies didn’t expand their capacities in the past because the US economy (QQQ) (SPY) was running at full capacity. Productivity wasn’t enough to cause economic growth.

OECD forecast

According to data provided by the OECD (Organisation for Economic Co-operation and Development), the annual growth rate of investment forecast has fallen in the past few years. In 2014, the annual growth rate of investment forecast was 4.2%. In 2015, it was 3.7%, and in 2016, it fell to 0.60%.

It has been forecast that in 2017, the growth rate could be 2.3%, and that in 2018, it could rise to 5.3%. Investment forecasts seem to be improving gradually. Market participants seem optimistic about future economic growth (IWM) (IWF) (VOO), and fund managers seem positive about long-term investments.

You may be interested in the article What’s Bill Miller’s Stance on the Equity and Bond Markets?

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