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TRC Blog

May 02 , 2011

Caution: The word of the day with regard to the current economic rebound.

Caution: The word of the day with regard to the current economic rebound.

It appears that most business markets, including real estate, have made a dramatic rebound from this most recent recession. But, will this rebound last? Or are there caution flags that we as investors should look at going forward? People are feeling better about their stock market investments, the ability to get bank debt and growth in general. But, here are five reasons why we should remain cautious: 1. Unemployment is still near its recent highs of 10% with a prospect of significant job growth remaining bleak. 2. Inflation has become a threat in both the U.S. and abroad. 3. While access to the debt markets have eased, the banks are demanding greater equity and less risk, thereby transferring risk to the borrower. 4. Oil prices remain near all time highs, resulting in extremely high gas prices and less discretionary spending by the consumer. 5. External factors (unrest in the Middle East, the natural disasters in Japan) are impossible to predict. Those of us in the investment business will continue to make our investments, but with a cautious and responsible approach. Alan Shor Co-Founder | President The Retail Connection
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