For investors who missed out on the rebound in equities following the
financial crisis in 2008 or for those who are underinvested in U.S.
stocks, opportunities may still exist according to a new whitepaper
published by Charles Schwab this week. The whitepaper, entitled “Take
Part in a Renaissance of U.S. Growth,” examines a domestic industrial
renaissance that has begun to unfold due to a host of factors including
improvements in U.S. manufacturing growth and competitiveness, a
domestic energy boom, the likely end of a commodity “supercycle” and low
inflation.
The whitepaper is published as a Q&A with three experts from the Schwab
Center for Financial Research – Chief Investment Strategist Liz
Ann Sonders, Managing Director of Market and Sector Analysis Brad
Sorensen and Director of International Research Michelle Gibley.
Schwab Center for Financial Research is the think-tank in Schwab’s
broker/dealer that provides investors and independent advisors with
Schwab’s point of view on a wide range of investing and financial
planning strategies.
Key points in the new whitepaper include:
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An industrial renaissance in the United States has begun to unfold due
to a host of factors, including a changing cost equation relative to
China, as well as a boom in the supply of energy at a low relative
cost.
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A surge in U.S. energy production is being driven by a fracking and
shale boom that helps drive energy prices down and increases jobs and
investment here at home. Downward pressure on energy prices also makes
it cheaper for manufacturers to return business to the U.S.
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The industrial and energy renaissances should ultimately benefit the
U.S. economy in multiple ways; including keeping inflation modest,
boosting capital and infrastructure spending, improving job growth,
lowering the trade deficit via increased exports, and improving
national security.
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The beneficiaries of the industrial and energy renaissance are likely
to include consumer discretionary stocks due to lower commodity prices
(aided by the stronger U.S. dollar), industrials stocks due to an
expected rebound in capital spending, and small capitalization stocks
due to their higher domestic exposure.
According to Sonders, Sorensen and Gibley: “We sensed that many
investors have written off the U.S. consumer as dead and are questioning
the sustainability of the U.S. bull market in stocks. But in our view,
there is a positive story about the trajectory for the country’s
economy, based in part on the likelihood that the United States becomes
a global economic powerhouse again in terms of manufacturing and
exports.”
The full white paper, part of Schwab’s Investing Ideas series, is
available here.
Schwab Investing Ideas offer analyses of key market trends and investing
opportunities investors can act on now from the Schwab Center for
Financial Research. More information, including other recently published
insights, can be found on Schwab’s Investing
Ideas page.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help
individuals create a better tomorrow. We have a history of challenging
the status quo in our industry, innovating in ways that benefit
investors and the advisors and employers who serve them, and championing
our clients’ goals with passion and integrity.
More information is available at www.aboutschwab.com.
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Disclosures
Through its operating subsidiaries, The Charles Schwab Corporation
(NYSE: SCHW) provides a full range of securities brokerage, banking,
money management and financial advisory services to individual investors
and independent investment advisors. Its broker-dealer subsidiary,
Charles Schwab & Co., Inc. (member SIPC,
www.sipc.org),
and affiliates offer a complete range of investment services and
products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation
plan services; compliance and trade monitoring solutions; referrals to
independent fee-based investment advisors; and custodial, operational
and trading support for independent, fee-based investment advisors
through Schwab Advisor Services. Its banking subsidiary, Charles Schwab
Bank (member FDIC and an Equal Housing Lender), provides banking and
lending services and products. More information is available at www.schwab.com
and www.aboutschwab.com.
Past performance is no guarantee of future results. Investing
involves risk including loss of principal.
The information here is for general informational purposes only and
should not be considered an individualized recommendation or
personalized investment advice. The type of securities mentioned may not
be suitable for everyone. Each investor needs to review a security
transaction for his or her own particular situation. All expressions of
opinion are subject to change without notice in reaction to shifting
market conditions.
The Schwab Center for Financial Research is a division of Charles Schwab
& Co., Inc.
(0913-6528)
Copyright Business Wire 2013