Will this be the next Roaring 20s?

By Fairport Wealth

Looking at the Past to See the Future

The ‘Roaring 20s’ was a period of change and growth for America. The economy took off, people flocked from farms to cities, and the invention of modern conveniences gave them more time to enjoy recreational activities. Interestingly, there are quite a few parallels between that time in our history and the period we are living through today.

Luma Wealth Portfolio Manager, Jason Adams, is intrigued by the similarities. Wondering whether the next decade will become known as the Roaring 20s 2.0, he sought to better understand whether history might repeat itself and what we can learn from the past. In the latest Fairport Flash, Jason shares his analysis and outlook for the future.

The 1920s
This was an era of prosperity. The allies had just won World War I and the Spanish Flu pandemic of 1918 was winding down. While Europe was recovering from the war, the U.S. was producing a significant portion of the world’s output and quickly moving from recession to boom. Financial markets were rising on investor optimism. Women were fighting for and gaining the right to vote and earn a living. The advent of the affordably priced Model T, mass market radio broadcasting, and convenience inventions such as the washing machine and vacuum cleaner gave rise to a consumer society in which people had the time and ability to do what they want. And the government was investing in infrastructure to further catalyze growth.

The 2020s
There is much to suggest that we are on the cusp of a new period of prosperity not unlike that of the roaring 1920s. Economic data is positive, the pandemic is winding down, markets are strong, large infrastructure plans are on the table with liberal government support, new technologies are supportive of dramatic productivity gains and the culture seems psychologically ready for an ebullient renaissance. Clearly there are differences now from then, some of which may dampen our progress, but overall the future decade looks bright and we are optimistic that history will look back on the 2020s as one of significant prosperity and growth.

Your investment portfolio
While our economy appears poised for lift off, as always, there are risks, which include the potential for rising interest rates, inflation, and higher taxes. It remains critical to have a financial plan in place, structured around your personal situation and goals, and a diversified portfolio allocated across multiple asset classes, industries, and geographies.

If you have any questions about how the economy may affect your investment portfolio, please reach out to your Luma Wealth advisor. And to help you prepare for the future, whatever it may bring, join our Financial Fitness conversation!