Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

Markets are continuing their fickle ways this morning … in fact, just over the 10 minutes prior to me writing this paragraph … the Dow, at first, jumped 113 points … and then dropped 84 points … so, of course, where we end the day is anybody’s guess.

The favorite comment I came across this weekend was a tweet by Jason Zweig who stated: “the stock market didn’t get tested … you did!” I mean … how true is this statement? It is not the action of the stock market that matters, but the reaction of the participants … some of whom are led by emotions rather than logic. Any portfolio moves (both buys and sells) should only be done after careful thought. It is important to know what you own and know why you own … but this is true no matter the circumstance … even during times when the market … or we … are not being tested at all.

That being said, I will share one of the big concerns regarding the economy. Will a boost in growth actually be harmful in the long run? It might … at least based on how we are going about it.

John Maynard Keynes is a former economist often quoted in articles … and his teachings are taught in many business schools. What is called classical theory are his beliefs that center around governments going into deficit spending to halt a rise in unemployment and get a nation out of recession. But he was not a deficit-loving man and felt that during good times, there should be focus on reducing deficits … or at least keeping them in check.

Over the last 10 years our national debt doubled. Where will we be another 10 years? And why is this so little emphasized on the floor of the House? Do they really think it will go away … … or solve itself … or will many be out of office if this animal decides to bite us in the backside?

It seems to me that we have to address this with more fervor than we have been … or our children will be the ones paying for the spending we are so freely willing to do today.

Stealing (and butchering) a line from a John Donnes sonnet of many years ago, I must point out something our politicians refuse to follow during times of prosperity.

Debt be not proud.

And this is a lesson we never seem to learn.

Have a great day,

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management
610 Freedom Business Center Drive
King of Prussia, PA 19406
(610) 337-9230 ext. 6

… as of 11:26 AM today …

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