Written by Retirement Solutions, Inc.
2018 marks the 10th anniversary of the Great Recession of 2008. Despite a painfully slow recovery, U.S. economic growth has been sustainable.
And yet, whenever things are going well, it’s only human nature to expect the “other shoe to drop.” Human nature and, well, the nature of the financial markets. The current concern among Wall Street analysts is the domestic corporate debt market, currently valued at $41 trillion.
If we are heading toward another correction, analysts point out that recessions often start in the credit markets. After all, credit is the source of capital for everyone, from companies to municipal governments to individual consumers. And capital is what powers our economy forward.
However, some of the signs that can predate a recession appear to be returning. Today, U.S. corporate debt is at an alltime high of over 45 percent of gross domestic product, which is higher than levels reached during the dot-com bubble and the housing and credit bubble. Furthermore, the trend during this recovery is for corporations to increase share buybacks, dividends and mergers & acquisitions activity rather than invest in long-term organic expansion.
While no one is raising the red flag for the near future, economists are looking down the road at what may happen in the next year to year and a half. If you’d like help evaluating your current financial strategy, please give us a call 801-465-6990.
Scott B. Wharton Retirement Solutions
This material is for informational purposes only and should not be considered advice. Investment advisory services offered through Retirement Solutions Investments, Inc., a Utah registered investment advisor. Insurance products and services are offered through Retirement Solutions, Inc., an affiliated insurance agency.
For more information about us as well as the complete article visit www.rsutah.com/blog/
