Various questions are posed to economists concerning the health of the U.S. economy, and about how quickly, or slowly it will recover. But do economists actually know more than investors about when, where and how the recovery within the economy and exchange traded funds (ETFs) take place?
The first thing that Ben Stein for Yahoo Finance wants you to know is that he is an economist, not a fortune teller. He cannot tell you the price of a commodity in a few weeks, nor can he tell you what energy prices are going to do. Here are a few things that he does know amidst many positive signs within the U.S. economy:
- A recovery in an economy is typically fast, and in general, if they start slow, they can turn fast. But this isn’t any kind of guarantee, because recoveries have been slow, too.
- There are certain limits on how fast and far a nation’s economy can grow. China hasn’t reached those limits, he says, but they’re there.
- There is much to be said about living below your means. Forget about living within your means. Staying as below them as you can will leave you better off in the long run.
- Basic good sense means not spending more than you can afford and always realizing that emergencies can lie ahead; these principles are your lifeboats in any flood.
Instead of wondering about when a recovery is going to happen and what it’s going to be like, it’s a better strategy to employ a safe and sound financial practice. Stein says he not a fortune teller, but he will tell you that simply having a more modest desire for things will always work in your favor. This way, no matter who fumbles, whether it’s the President, the Fed chiefs or the financial gurus, you will always give yourself a better chance stay afloat even when the economy doesn’t.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.