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:
- 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.
- 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.
- 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.
- 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.
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. Follow us on Twitter, Facebook, YouTube, LinkedIn and our Schwab Talk blog. 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.
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