Economics is all about perception. If you doubt that’s true just talk to any stockbroker. For better or worse, buying and selling decisions in our financial world are largely based on perception — perception of current conditions and more important of the short and long-term prospects for return on investment.
With that in mind, I’ve noticed a habit of thinking within the ranks of our industry that is unproductive, arguably even corrosive. For whatever reason, be it politics or the hangover from the last recession, many people among us have a dreary view of the economy – despite a bevy of economic indicators that by contrast paint an extremely positive picture.
Because there’s such a huge psychological element to economics, I believe it’s in our shared interest to shed that downbeat assessment and instead replace it with an enthusiastic acknowledgement that, right now, a great many of the economic cards are face up in our favor. Check out these specifics:
The stock markets are thriving. This past March saw the DJI hit its highest close ever and is currently up 170 percent from its nadir. The S&P 500 is up 187 percent since the market low on March 9, 2009, while the NASDAQ is up a whopping 265 percent.
Home values are improving with prices up over 11 percent last year and continuing to rise through the first quarter of 2014. Home values in more than 1,000 U.S. cities are expected to surpass their pre-2008 levels within the year, according to a new report released by Zillow. And as home values grow so too does the availability of equity-based loans for home improvement, the single most important factor driving the boom years prior to the recession.
The rich are getting richer. This may cause some pundits to fret over income disparity, but let’s face it, for our industry, which largely targets affluent consumers, the swelling ranks of the rich is good news. According to Credit Suisse, the United States is expected to have 16.9 million millionaires by 2017. (Millionaires are defined as those with total assets minus debts of more than $1 million). That would mark a 53 percent increase from America’s 11 million millionaires today.
And, there’s this wonderful nugget: the Baby Boomer generation is currently in the process of inheriting the largest transfer of wealth ever from their parents and grandparents. According to a 2010 study, “Inheritance and Wealth Transfer to Baby Boomers,” commissioned by MetLife from Boston College’s Center for Retirement Research, two-of-three boomers should get something, with $64,000 being the median amount. The study anticipates an inter-generational transfer of wealth totaling $11.6 trillion, including some $2.4 trillion that has already been gifted.
I’m certainly not saying there aren’t issues that warrant concern, e.g. stability in foreign currency markets, burdensome government regulation and our baffling tax code to name a few biggies. Truth told, I can’t rem
ember a time when there wasn’t some form of economic bogeyman waiting in the wings. Sometimes those concerns materialize, such as the housing market bubble bursting at the end of 2008. Other times, our paranoia is just that. Remember the Y2K scare?
The bottom line in all of this, I believe, is that we’d do well to embrace the fact that our industry’s prospects are as good as ever. By “embrace” I specifically mean it’s high time to double down and promote the sweeping benefits of pool and spa ownership and do so with confidence and the full power of our convictions.
That kind of positive messaging could and should be contagious, but it has to start with our ability to recognize the opportunities that are currently on the upswing.
Vance Gillette is an outspoken proponent of the pool and spa experience. An industry leader with 48 years of experience, he has traveled extensively through the U.S., Europe, Canada and Australia representing such prominent firms as Arneson Products, Jandy Products, Teledyne Laars, Waterpik Technologies, Zodiac Pool Systems and now…Vance Gillette Ventures.
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