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Outlook 2013


Presented By: David W. James, CFA ~ Sr. Vice President / Director of Research

Economy

Unfortunately, the economy faces many hurdles. Politicians often try economic "fixes" that lead to hardships in post-election years as the prospect of voter wrath is far away. Since 1945 post-election years have been touched by a recession 59% of the time.

Higher taxes in 2013 will curtail disposable spending. Our analysis of individual state tax codes over the last ten years suggests higher tax rates hurts economic growth and job gains.Surprisingly, it also leads to slower tax-revenue growth than states with lower tax rates.

The new health care law increases regulatory burdens. The Competitive Enterprise Institute estimates the total regulatory compliance burden for 2013 will top $1.8 trillion; triple our national spending on defense.

In the recent past our nation's problems have been mitigated by an export boom. Export growth has averaged over 9% a year. Recent numbers have been much more tepid. Furthermore, Europe and Japan are facing recessions, making a rebound in exports unlikely.

There are areas of opportunity. The housing sector is finally recovering. Traffic levels of prospective buyers are at levels usually associated with rising home prices. Construction and related industries may benefit. The auto sector is also seeing a rebound.Since the average car on the road is over 11 years old we are seeing a steady rise in auto sales.
Positives Negatives
Positive Manufacturing new orders are rising Negative Higher taxes
Positive Improving home sales/prices Negative Too many regulations
Positive Uptick in auto sales Negative Quantitative Easing ineffective
    Negative Stronger dollar and sub-par exports
Download The Long-term Economic Report (.PDF 1.8 Mb)   PDF

The views and opinions expressed are those of
James Investment Research, Inc.

This information is of a general nature and does not constitute financial advice. It does not take into account your individual financial situation, objectives or needs, and should not be relied upon as a substitute for financial or other professional advice to assess, among other things, whether any such information is appropriate for you and/or applicable to your particular circumstances. In addition, this does not constitute an offer to sell, or the solicitation of an offer to buy, any financial product, service or program. The information contained herein is based on public information we believe to be reliable, but its accuracy is not guaranteed.

Past performance is not indicative of future results.
 
 
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