Growing Up – and growing old

At Meridian, we just did our annual family pictures—and we are again shocked at how big our kids are getting—they just keep growing up!

Speaking of growing up…our US expansion just keeps growing older too! It is now the longest US economic expansion on record:

Janet Yellen famously said, “I think it’s a myth that expansions die of old age… So the fact that this has been quite a long expansion doesn’t lead me to believe that… its days are numbered.” However, the signals in the economy are those of a mature and slowing one. As this chart from Fidelity shows, the current economic reports of solid but moderate growth, compressed earnings, and policy changes (interest rate cuts by the Federal Reserve) appear to be soldly late cycle:

And, the stock market is acting like it is late cycle too:

But, mature isn’t necessarily bad—according to Fidelity, the average late cycle lasts about 18 months with an average stock market return of 6%. And, growing older just leads to a different set of challenges and opportunities. Certain sectors tend to do well in slowing economic environments:

Our economy growing older leads to new portfolio challenges and opportunities—at Meridian, we continue to help our clients navigate the changing economic landscape…and we are growing too!!