The director of the Economic Cycle Research Institute refers to this as a Rodney Dangerfield recovery. Here’s a link to the video interview-worth watching especially if you are currently awash in pessimism. Things are coming along nicely, but no one cares. (Although if growth continues to accelerate, all the investors who just piled into bond funds might start to care a lot.) From the perspective of a practitioner who is not an economist, I’m not surprised the recovery has been pretty good. The market has been strong over the last 12 months, and the market is a leading indicator. In addition, other market-based indicators like the yield curve have suggested a strong recovery is on the way.
Mr. Achuthan is also forecasting more frequent ups and downs in the economy going forward, so he concludes that buy-and-hold investing is dead. We nominate him as a charter member of Economists For Tactical Allocation.
