Stock prices are driven by one thing. And that’s profits, or at least the expectation of greater profits.
When the economy is doing well and profits are expected to keep rising, stocks will generally go up. It really is as simple as that. But with the economy hitting the tailend of the business cycle, many investors are worried that earnings are starting to peter out, which is a big deal considering how high stocks have run.
But analysts at Putnam Funds don’t think you need to worry.
According to their analysis, we could be seeing the beginnings of another earnings cycle. With that, stocks still have more room to run higher. For investors, this is just another bullish point for owning equities today.
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