Stay bullish on America, even though there are reasons to become discouraged about the economy.
In a recent report, Joseph Quinlan, chief market strategist at Bank of America Merrill Lynch’s US Trust division, discussed 10 reasons to remain optimistic even though a lot is going wrong.
“For investors, don’t buy the coming election-related hype that America is in decline,” he wrote.
“Nothing could be further from the truth. Stay long the United States.”
Here are 10 reasons why you should:
The US accounts for one-sixth of global gross domestic product on a purchasing power parity basis, even though it has just 4.5% of the global population. And among developed economies, the US economy is one of only a few where GDP is up from precrisis levels.
Manufacturing output totaled $2.2 trillion in nominal terms in 2015, up 26% from the troughs of 2009. Additionally, as the chart shows, manufacturing employment has been on the rise since the recession. This has been propelled by moderate wage growth, technology, and cheap energy costs.
Multinational manufacturers are in a position to meet the needs of developing nations.
What the US exports in a month is greater than what most countries export in a year, Quinlan said. China leads in global exports, but is not that far ahead of the US.
'Long-term, no one is better leveraged to global growth than many small, medium and large cap U.S. firms,' he wrote.
A large pool of skilled workers and transparent rule of law are among the magnets that attract capital from around the world to the US. From 2009 through 2014, FDI inflows totaled about $1.1 trillion, or about 15% of the global total and more than half again as large as China's.
The inflows should continue to support real growth, employment, and asset prices, Quinlan said.
Apple, Google, Microsoft, McDonald's, Coca-Cola -- the list goes on and on.
As the global middle class continues to grow, leading US brands are in a great position to meet their needs.
The smartest people in the world are attracted to America's entrepreneurial, risk-taking culture.
Thirty of the universities in the QS world rankings' top 100 universities for 2015 were in the US, as were 10 of the top 20.
Those amazing schools support US education receipts, which totaled $30.5 billion in 2015, up 73% from 2008.
Gold and the Chinese yuan have become more popular, but the greenback is still the undisputed reserve currency, accounting for 64% of global central-bank reserves in the fourth quarter of 2015.
America has clawed its way back into the top-three after slipping in the years after the financial crisis. That's based on the World Economics Forum's global competitiveness report.
'There have been a few surprises in the post-crisis period but none bigger and more significant than America’s energy revolution,' Quinlan wrote, citing the shale-oil boom in states like North Dakota and Texas.
This is a revenue generator for the government, and lower US energy costs could increase direct-investment inflows.