Confidence Restoration!

Many factors play an important role in driving the stock market, but few are as important as confidence restoration!

The focus of stock investors is currently on whether the Fed will finally ease later this month and by how much, whether a recession will be avoided, and whether the profits of any companies currently owned are headed for a disappointment.  While investors regularly monitor an array of issues, what is often overlooked is the important role played by main street confidence.  A steady revival in confidence among main street’s private sector players has historically proved to be a major asset for the stock market.  Every day confidence improves, consumers spend more freely, businesses expand operations, jobs increase, and investors are more willing to pay up!    Indeed, the utter destruction of confidence during calamities allows its restoration to often become the primary force usually driving the ensuing bull market.