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Strebler's Perspective

People’s expectations are an immensely important factor in the economy, which is why the President and other leaders often paint rosier pictures than is justified by reality. If we believe things will get better, then we’ll buy more stuff, hire more workers and – guess what? Things will get better. So why not be an optimist, says” the glass is half full” crowd?

In the investments business, expectations’ kissin cousin is psychology. Bull and bear markets exist in no small part as human psychology shifts from optimism and greed, to pessimism and fear, and then back all over again. Robert Samuelson wrote about a shift in America’s psychology in The Washington Post a few weeks ago. In contrast to the mindless consumerism and debt-building of the 1990s and most of the 2000s, Samuelson suggested that “The bias is (now) against extra spending. Eat out? Try leftovers. Remodel the basement? Oh, leave it ... Log in or subscribe to continue reading.

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