Two weeks ago The Guardian published the results of a Harris poll on the economy. The findings were very interesting:

· 55% of those polled believe the economy is shrinking, and 56% think the U.S. is experiencing a recession. It’s not. The economy hasn’t contracted since mid-2022 and is currently growing at an annual pace of about 1.3 percent

· 49% believe the S&P 500 index is down for the year. It’s not. The S&P 500 is up 10 percent and that’s after a 24 percent gain last year.

· 49% believe that unemployment is at a 50-year high. It’s not. It’s actually near a 50-year low.

· 72% think inflation is increasing. Wrong again. Today’s 3.4 percent inflation is down from its post-Covid peak of 9.1 percent and stable.

How can so many Americans be so wrong? I see three possible reasons: 1. People don’t follow the economy and markets. 2. People are misinformed, getting their information from bad sources. 3. People are frustrated by paying higher prices so they view everything about the economy as bad. Number 3 is the most likely.

The half of Americans who are wrong about the economy can be forgiven. They see higher prices at the pumps and higher prices at the grocery stores. Housing is unaffordable. Even if prices stayed flat the frustration would remain the same. As I’ve previously written, falling inflation doesn’t mean lower prices. It simply means prices are rising at a slower rate.

Most people are not economists. A poll can ask about a recession but how many people know what a recession is? Instead, people know that their paychecks don’t go as far as they once did. Blame inflation again.

Interestingly, while many believe the economy is shrinking and we are in a recession, consumer spending shows the opposite. Traveling over Memorial Day weekend reached a record high. The TSA screened 2.9 million people on Friday. It felt like most of those travelers came to Tahoe!

With all the negativity many investors are choosing money-market funds over riskier investments like stocks and bonds. It’s hard to argue with a risk-free 5 percent return. But those with a long time horizon should stick with stocks, especially dividend payers. As the esteemed investor Peter Lynch once said, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.” I couldn’t agree more.

David Vomund is an Incline Village-based Independent Investment Advisor. Information is found at or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.