Many Wall Street and economic pundits tried to talk down the U.S. stock markets down in early 2013. They stated a long list of economic and political headwinds for the U.S. economy.

Many of those concerns have come to pass.  Interest rates have moved higher. Unemployment is still stubbornly high. The U.S. economy is nowhere near full capacity.

The second quarter earnings announcements for most U.S. companies have now ended.  Company earnings were good; but the outlook for earnings going forward has been lowered across the board.

Minnesota stock market investors can learn a very valuable investment management lesson from the last few months.  The lesson is that the U.S. economy and the U.S. stock markets can at times be separate events.

This is a very important investment concept. Learn to separate the outlook for the U.S. economy from the actual investment performance of U.S. stocks.

You can fill up your entire day reading and listening to economic and political theory.  Remember that economists and politicians are not business people.  It’s like comparing apples to a bundle of oranges.

Long term stock market investment success requires more observation skills than economic knowledge and political acumen.  The development of an unemotional and unbiased perspective is what is necessary for long-term investment success.

Ric Lager
Lager & Company, Inc.

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