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A Year and A Decade


With the closing of the 2019 year, we also closed a decade. From an investing standpoint, not only was it a very rewarding year; but the past decade helped ease the investing pain and frustration of the first decade of this century.

Let’s jump into a brief review regarding the past year and add some interesting tidbits regarding the just completed decade.

GDP Growth

GDP

Our first look is at the economic growth of the United States as measured by the Gross Domestic Product (GDP). Our forecast for the 2019 GDP growth rate was 2.8%. We will most likely end up in the 2.3 – 2.4% range. Uncertainty with respect to trade issues between the US, China and the European Union (EU) as well as political uncertainty throughout the world were all contributing factors to the differential in our forecast and the final GDP growth rate.

GDP growth rates have slowed from a four percent annual rate in the 1950’s to just over an annual two percent GDP growth rate during the past 10 years. The growth rate slowdown is a little bit surprising given the enormous innovative changes in technology. At least some of the headwinds to GDP growth rate can be found in a decreasing population growth in the U.S. both in terms of birth and immigration as well as the baby boomers becoming more fully entrenched in their retirement years.

We expect GDP growth to be around 2.2% next year. We anticipate some relief in the trade/tariff war with China and expect the EU economy to bottom out in the first half of the year with a little positive momentum as the 2020 year closes out.

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