There have been numerous improvements across the entire national economy in the last year or so, and while some experts might have been unsure of how those might continue into the future, it seems that those who doubt in the recovery are becoming scarcer.
Financial experts now have a fairly positive view of the prospects for the future of both the U.S. economy on the whole and the stock market in particular, according to the latest Advisor Confidence Index issued by Penton’s WealthManagement.com. Through the end of February, the ACI stood at 109.7, the highest level observed since April 2012, and was up 8.4 percent from January’s numbers. It was also the third consecutive month in which experts predicted more improvement.
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On a more macro level, the number of experts who are more confident over the current economic outlook grew 5.2 percent, and the stock market outlook improved 4.3 percent, the report said. But the real increases came in the long-term. The advisers who believe there will be improvement over the next six months rose 7 percent, while there was an impressive 18 percent increase in the number who expected better situations over the next year.
“Clearly, the U.S. economy is mending,” says ACI panelist William Green of GL Capital Partners. “Home sales, employment and confidence all look stronger. Expect a few bumps or flare ups along the way, but the U.S. economy is forming a positive base. My outlook for 2013 and 2014 remains quite positive.”
However, it should be noted that among those polled, it’s believed that most of the improvements have been driven by federal intervention rather than more natural economic improvements, the report said. The Federal Reserve Board, for instance, is artificially depressing interest rates through its qualitative easing bond-buying efforts, which in turn is driving more buyers into the housing market, improving that on a national basis. However, if the Fed were to cease those efforts and allow interest rates to increase once again, more significant economic problems could arise in the future. Fortunately, the Fed apparently plans to continue its bond-buying at least through the end of this year, and possibly longer.
The housing market has taken huge strides in the last year or more, with prices rising between 6 and 7 percent during that time. However, that type of growth is not expected to continue, and could slow to only 3 or 4 percent improvement throughout 2013.