Real estate plays a big role in the US economy and it is looking strong, benefiting from demographics and popular culture. Watching HGTV has had an influence on Millennials who want to buy their own homes and are probably better informed than previous generations about all the options available. House flipping is becoming popular again, especially in CA. Companies catering to this generation’s buying potential are likely to flourish.
When it comes to the stock market, there are numerous factors that influence losses and gains, including company earnings, interest rates, and global economic expectations. Losses and gains can’t be attributed to one factor alone. However, corporate earnings growth is a big driver of market growth. When company profits continue to grow, the market is sure to follow.
Betting against America can be dangerous and, so we think that this is specific to industries at this point. Our advice as a team is not to sell off altogether but simply to rotate out of ‘over-hyped’ sectors and into others where there is likely to be an increase in spending. Construction and security are two such sectors that are likely to show continued growth.
