THE NEW MILLENIUM
Well, I guess the first thing we can say is, we made it! For all the nay-sayers, all the people who thought the world would be over by now, who never expected to be reading this column or anything, anywhere, I repeat, "WE MADE IT!" And isn't that a lesson we should all learn? That is, most of the time the gloom and doomers are wrong.
As an example — if you look at the entire past century, the people who said the market couldn't and wouldn't go higher, that it was overpriced and a big bubble looking to be popped, were right, but just every once in a while. Even if you give them the entire decade of the 1930s, they were still basically wrong most of the time. You could probably throw in the '70s as a not-so-hot time, but previous to 1929 and from 1945 forward, especially the last two decades, things have been little short of wonderful. As I tell my clients, the market has "crashed" all the way to 11,500.
I think the same "engines" that have been driving the current wave of prosperity for most of the last two decades will continue in place. Of course, when we say "higher" we don't mean in a straight line, and it isn't guaranteed. There will always be fluctuations, there will always be a business cycle, as well as market corrections and economic recessions. But that is the day-to-day "stuff" that will be a part of what I still believe to be an overall bigger and higher trend.
The engines currently in place include freedom, the baby boomers, and technology. Many times people overlook freedom, but it is that personal freedom and the freedom of information that is a driving force in the current economic explosion, not only in our country, but perhaps more importantly, worldwide.
Technology continues to be a major factor revolutionizing the world. Michael Dell of Dell Computers thinks we are in the second inning of a nine-inning game that will make the industrial revolution look like child's play. Who am I to disagree with Michael Dell? Technology is the impetus that is making businesses increasingly productive. Productivity, defined as output-per-worker-hour, is what has driven corporate profits higher and allowed workers to be better compensated while keeping inflation under control.
As stated in this column before, if I give you a dollar an hour raise and you are no more productive than before, then it is inflationary and it is not good for the company, and in a larger sense, it is not good for the country.
But if I give you a three dollar increase in pay and you are 5% more productive than you were before, then that is not inflationary, and it is a win/win situation, not only for the worker, but for the company, and again, on the larger scale, for the country.
Finally, there are the baby boomers — that group of 80 million people representing almost a third of the workforce in this country — that are reaching their earnings peaks while, at the same time, reaching their productive peaks.
At 50, most workers are earning more than they ever have before and their greater expenses are beginning to fade away. Home mortgages get paid off, children move out on their own, and this becomes a high saving and investing period. It is that saving and investing mode that the baby boomers are embarking upon that is, in the end, the final fuel driving our economic engine.
As I view this year and the decade ahead, if not the century ahead, I continue to be bullish not only on America but on the entire planet. For our country and for this year specifically, I think we will again see a wonderful economic picture. That the year 2000 might not match, statistically, what has gone on in the two previous years is a possibility, but that is because 1998 (especially) and 1999 (to some extent) were really near perfection.
I still believe there will be many people that will lose money investing in the coming year, just as they did in the terrific previous years. I believe most people, when considering investments that will affect their retirement living, should consult with an investment professional that can guide them. I still believe that your retirement or children's college education savings should not be left to a "do-it-yourself" project.
(Tom Butenhoff is a First Vice President with J. E. Liss & Company in Milwaukee. The views are his and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)