I am amused a bit to read a post on today’s Wall Street Journal Economics Blog http://blogs.wsj.com/economics/ titled, “From Recession to Recovery Five Steps Under Strain.” The post begins with the line “As more economists expect a recovery to begin later this year…”
It reminds me that just as the whole notion of “recession” needs to be redefined, so does the notion of “recovery” need to be redefined.
The post outlines the five major factors that push a recession into a recovery. Yet if you look closely at the five factors, you can see the inherent volatility in each.
Economists and investors will become increasingly frustrated when they finally realize that the long awaited, 5-7 year sustained up cycle won’t materialize — not in 3 months, not in 6 or 12 months — not in the forseeable future.
This is the “new normality”, which investors will have to eventually accept and adjust to if they want to finally move forward with new, fresh investment strategies investing into companies who have also made their own adjustments to the “new normality”.
The sooner investors, business leaders and political leaders realize this, the sooner we will be able to get onto a new track of long term, sustainable prosperity (vs short-sighted, knee-jerk disruptive short term profit taking) driven by investment strategies that factor in turbulence, chaos, risk and uncertainty that will be with us for the foreseeable future in this, The Age of Turbulence.
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