While the stock market may be trading near its all time high, the economy isn’t in such great shape. First-quarter GDP was weak given the Q1 contraction of over 2 percent.
Second, while the jobs data appears to be better on the surface, there is evidence to the contrary. For instance, while the unemployment rate is down, the percentage of Americans who have jobs has fallen as well as people who have dropped out of the labor force as Baby Boomers begin to retire faster than young people are entering the workforce. Furthermore, CNBC just posted an article that says that while people are getting jobs who lost them during the Great Recession, these jobs pay 23 percent lower wages than the jobs they lost.
Finally, we are seeing an escalation in geopolitical tension, and this is manifesting itself in economic sanctions. This hurts the economies of all of the players involved, and it even has a residual effect on other national economies.
While we haven’t seen these problems play out in the stock market yet, we are reaching the end of quantitative easing, which has supported the stock market throughout the past 5 years. Each time the Fed stopped its QE program, the market fell. With this in mind, it makes sense to take measures to protect yourself . Here are some tips.