Trickle down economics works. It may not distribute the wealth evenly; the top 1% may receive more than the rest of the population. But the middle class benefits from a stronger economy. The new wealth does not ALL go to the super-rich.
Here’s how the middle-class benefited from increased government spending in 1983 and from lower taxes in 1986. Even with a recession in 1990, the middle-class was better off at the end of the century.
Source: Frontline
http://www.pbs.org/wgbh/frontline/article/the-state-of-americas-middle-class-in-eight-charts/
Here’s how the middle-class benefited from increased government spending in 1983 and from lower taxes in 1986. Even with a recession in 1990, the middle-class was better off at the end of the century.
Source: Frontline
http://www.pbs.org/wgbh/frontline/article/the-state-of-americas-middle-class-in-eight-charts/
3 comments:
Hi Deborah,
I have just read your book timing the market and enjoyed it thoroughly. it is much more actionable than "Nowcasting The Business Cycle" I read previously and thank you for that. May I ask a few pointed questions?
How has this system been working through 2017?
Would you change any of your buy/sell criteria based on new data?
Your DOW signal for buying do you only buy when all 30 decline the same day or just a certain percentage of the individual stocks?
How do you know when to wait for the Dow buying signal of all 30 to be down or skip it? Since I believe it was only used once on the buy trades later in the book
Your DOW signal for selling when only a few stocks rise while the majority declines, is that just a warning or is that a clear signal to sell on its own?
For the DOW sell signal/warning do you have a specific threshold like 2 rise out of 30 or a percentage you use?
Is ONEQ still recommended as a replacement for SPY if your not using sector based trading?
What books/resources do you recommend to learn specifically which sector you should be in if you wanted to read more about it, along with determining where we are in the business cycle?
Are GLD/REITs/Foreign Currency the main asset classes to switch between for profit?
When switching to foreign currency/foreign investments how do you know which countries to choose? I know for individual stocks you could use Grahams ratios but how do you know the their currency will gain in value in a year vs the dollar? How do you choose a country that could have economic ruin such as Greece or Venezuela? it would be terrible to have your REITs or stocks nationalized.
Finally I thought we were supposed to leave equities when we got the yield indicators and such but later you recommend changing an allocation? Is there anything wrong from changing SP500 or sector to REIT or GLD based on these indicators with 100% allocations?
If I should change balance of allocation what is the roughly correct percentages?
Ok I am sorry for hitting with a wall of text but I loved your book and love your premise of not having to get killed every market down turn and combining it with an individual stock selection based on Warren Buffets. Though I know he rarely ever sells it. Thank you for a great book.
Sincerely,
Jonathan Brown
Dear Jonathan,
The short answer to your question as to whether I would change anything in the book is “No.” The indicators are working well through 2017.
You ask excellent questions that deserve more than a cursory response on a blog. If you tell me where you live, we may be able to discuss your topics over coffee. I travel frequently so meeting is a real possibility.
All my best,
Deborah Weir, CFA
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