This month, Jason Weaver discusses flattening GDP components, recession and dividend growers.
GDP COMPONENTS
4 components of nominal GDP: +6.5% in Q1 2022
Personal consumption expenditures: +2.7%
All Goods and services produced for household use (almost 70% of total GDP)
Business investment: +1.2%
Goods and services purchased by the private business sector
Government spending: -0.5%
Includes federal, state, and local governments
Net exports: -3.2%
The dollar value of total exports minus total imports
RECESSION
Recession Definition = 2 successive quarters of negative economic growth
Since 1953, average length was 10.3 months.
Cumulative SPX return was lowest in the year leading up to a recession (-3%), followed by 6 months before (-2%)
Average loss of 1% during a recession.
Reminders
Markets look ahead while economic data looks behind.
Each time is different
DIVIDEND GROWERS
Help to enhance total returns
Can provide a regular source of income
Have offered lower volatility and reduced downside risk relative to other equity strategies.
