This week I attended the Newport Beach Christmas Parade of Lights. It’s an annual event where dozens of yachts, decorated in Christmas lights, parade around Newport Harbor. The sights, sounds, music and festive parties were a sight to behold. The parade passed by multi-million-dollar homes, high end restaurants and hundreds of additional moored yachts, all full of people celebrating the season. One of my first impressions upon seeing the large number of elaborately decorated yachts, and homes along the harbor, was the reality of our booming economy. Sometimes it doesn’t take an economic report to tell you how things are doing.
Granted, the owners of those yachts tend to have money in any economic condition, but the atmosphere of the event was still a reflection of the times. I remember well the subdued celebrations during the Christmases of 2007-2008. During those years many large financial firms cancelled their annual exotic trips, partly due to budget cutbacks but also out of respect for those who were struggling with the tough economic times. A review of my weekly columns from those years reminds me of the many challenges our nation was enduring, as I advised each week on how to get through it.
Our country is passing through an era of unprecedented economic growth. Of course, the growth benefits the already wealthy, but at record levels it is also reaching those areas of the population that are often left out. Unemployment is at or near record low levels, most notably among several minority groups. I dare say that if you want a job in America today, you can find one; probably several.
Many factors are contributing to Americas economic success but five stand out in my mind. 1 – Energy independence. The availability of energy at a stable price is a critical factor in economic growth and sustainability. Finally freeing ourselves from foreign energy dependence has given American businesses the ability and confidence to grow. 2 – Abundant Capital. Continued low interest rates and an abundance of available investment capital is the life blood of business growth. 3 – Reduced Regulation. There is a fine line between regulations that maintain orderly economic activity, and those which stifle growth and investment. We are currently enjoying a reduction in regulatory burdens and it is allowing businesses to grow more freely. 4 – Technology. Advancements in science and technology continue to make life more enjoyable and more affordable for average Americans. Fifty years ago, it took billions of dollars in computers to land Apollo 11 on the moon. Children today play video games on cheap cell phones that contain more computing power than NASA had in 1969. 5 – Reduced Taxes. The government is inefficient by nature. Any money it gives back to the citizens in the form of lower personal and corporate taxes will be spent more wisely and efficiently, benefitting the economy.
Our nation has been very blessed. As we ponder whether next Christmas will bring similar success, the ability to maintain the above five items will be a critical piece of the puzzle. Merry Christmas!
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
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