Redrick Terry:
It is now time for 4 Your Money. We’re joined by John Nelson, Financial Advisor at NelsonCorp Wealth Management. John, welcome back.

John Nelson:
Thank you, Redrick, happy to be here.

Redrick Terry:
Absolutely. So, far it’s seemed like the US has kind of been leading the way in terms of the global economic recovery. Do you think that will continue to be the case or could we see other parts of the world eventually take the lead here?

John Nelson:
Yeah, the US has definitely led the charge. I think we’re further along in the recovery process than many other countries are at this point. You look at India, Brazil, not that long ago with the waves that they’ve been affected with. Certainly the US, it’s further along in this process. If you look at the steps that we’ve taken here in the United States, the Federal Reserve acting quickly, the stimulus payments that were provided. Short-term has been a very good thing. It’s stabilized things, brought a lot of stability to a lot of people in businesses, which has helped the overall economy, as well as the financial markets.

John Nelson:
The long-term implications of that, certainly unknown at this point, but could be concerning with the amount of money spent. But other countries dealing not only with just COVID numbers overall, but they’re seeing higher interest rates than we have so far here in the US, just given inflation has picked up here in the United States is getting a lot of attention. Outside of the US, has picked up a whole lot more, which has forced a lot of those countries to pull back some of their relaxed or lower interest rate type policies. So the US has definitely led the charge and we see them continuing to, and then hopefully other parts of the world continue to pick up once they get COVID numbers under control.

Redrick Terry:
Well, we’ve certainly come a long way from the bottom of the crisis on both the economic front end and financial markets. But at what point should we be concerned that all that good news has already been factored into current stock price?

John Nelson:
Yeah, that’s the tough part. So overall if you look historically, the earnings or increase on earnings, those are some of the valuations when looking at the market or individual companies that are pretty easy, I’ll say, to determine those numbers. The change in valuation or the investor sediment is the larger point, I think we’re all facing right now. And getting that right, is always a big question. So the chart I have with me today just shows how far things really have come. In the blue at the top, you can see in the United States. And if we look in the summer of last year, 2020, the differences here, since then, are pretty dramatic.

John Nelson:
So we see the sharp rise, this is what we call the economic surprise measurement here, when we’re comparing the United States to the rest of the world. But you see the sharp rise, both in the US and down below globally, followed by a softening here in the United States. I’ll again, draw conclusions back to the United States being much further along in their recovery. So some of that give back would be expected. The global aid down below in the red, they have not seen the giveback that the US has. So that flattening out there is maybe a sign of say, opportunity for other markets versus here in the United States, its something we’re watching very closely. But an interesting dynamic that does this hold, or is it simply just a measure of where each part of the world is in terms of handling the COVID-19 pandemic?

Redrick Terry:
Well, so I guess John, the question becomes, how can this help inform people’s investment decisions?

John Nelson:
Yeah, I’d say maybe in our business more than anything else, that when you do things pretty much the way that everyone else does them, you end up getting results, that pretty much everyone else gets. So as with anything, is there really a way to look at things differently, get creative and look at other parts of the world. I’ll draw this conclusion to looking at client’s holdings or the overweightness in US companies is pretty dramatic in terms of what people are invested in.

John Nelson:
So looking outside potentially the US who have seen a significant rise, maybe a good opportunity or something worth spending more time looking at, because oftentimes we see 100% of client holdings or investors’ holdings domiciled here in the United States. And what has worked very well over the last 10, 11 years, looking out and finding some of those opportunities that may not be on everyone’s radar at this point, may serve the viewers very well.

Redrick Terry:
John, as always, we thank you so much for being with us today.

John Nelson:
Thank you Redrick.

Redrick Terry:
And if you missed any part of our discussion, we will make it available to you at OurQuadCities.com.