The State Of The Economy
BOSTON (CBS) - This year seemed to have whizzed by!
Last year at this time I thought the stock market would have a good year. Closer to the average of 8%. I like this year's return much better but most of that was due to the Fed's monetary policy which may last thru the first two quarters of 2014.
But will the Federal Reserve be able to exit Quantitative Easing (QE) and raise interest rates without causing a downturn in the stock market next year? I wish I knew! Interest rates will go up and soon.
As the stock markets continue on such a tear fears of a bubble materialize. Is Facebook really worth more than $140 billion? Google $200 billion? And why are we paying so much for their stock?
The global economy is slowly turning itself around despite all of the catastrophes that have happened worldwide. We hear more about Europe when their economies are in trouble but things look good for your international investments.
My crystal ball definitely needs some Windex when it comes to Washington! We managed to avoid the Fiscal Cliff. But what lies ahead this spring with a dysfunctional Congress is impossible to second guess. We still must address the deficit and taxes.
As for taxes, when you go to fill out your 1040 you will see firsthand the magic Congress performed last year. Taxes did go up but mostly for the very rich.
The job market has been slow to really recover but it is recovering. North Dakota has an enviable unemployment rate of under 3%. But most of us do not want to move to North Dakota no matter how many jobs there are!
I am still meeting this year's college grads and postgrads who are unemployed or underemployed.
The housing market in New England certainly has improved and I believe will continue to do so. But it will be a long while before we are in another housing bubble here.
