“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”
– Charles Dickens, A Tale of Two Cities.
We think this quote by Charles Dickens in many ways sums up the current financial and economic environment and certainly reflects the partisan politics of the day. In client conversations, one of the most frequently asked questions is, “How is the market doing so well, while the U.S. economy remains so fragile?” It’s a very appropriate question that we will address in this letter, but in short, when trillions of U.S. Dollars are pushed into the financial system, asset prices will almost surely increase: think stocks, bonds, and homes. So, in the Dickensian sense, for financial and real assets it’s the best of times, but for certain industries and the millions of unemployed, it remains the worst of times.
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