AUBURN — Edison Byzyka has never sounded more optimistic about the future.
“We’re living in an environment, especially on the economic side, that we have never, ever witnessed before” on a positive scale, Byzyka said this week.
Locally, northeast Indiana is “on fire” with economic activity, said Byzyka, the chief investment officer for Credent Wealth Management of Auburn.
“The health of consumers is actually the best we have seen … in 30-40 years” on a national basis, as measured by credit card debt and disposal income, Byzyka said.
“I think we’re only in the second or third inning” of a spending boom spurred by reopening from the COVID-19 pandemic, he said. Four of the five industries hiring the fastest are related to recreation-related activities.
In this region, “We are seeing tremendous shifts from a demographic standpoint — people moving into the area,” Byzyka said. “We can’t build new homes fast enough. We have almost no inventory of existing homes.”
Average incomes are rising in the region, and private and public investment are strong, he said.
“I feel really, really good that we have local and county-based governments that actually want to support that growth,” Byzyka added.
“I think we are further bolstering this northeast Indiana area, where, if any sort of economic turmoil does happen down the road … I think we are insulating ourselves from that.”
The local area “has phenomenal low cost of living, relative to wages” and a favorable, central location, he said.
“We’re fortunate to have businesses in northeast Indiana that need and attract really good talent,” Byzyka said. “The standard of living and the cost of living are just superb, and we’re very lucky to be living in that environment.”
Byzyka speaks from his own recent experience in hiring for his team of financial analysts. In the past three years, that team has grown from one to nine analysts, with plans to hire two more.
“What’s great is, these are all individuals who have come back to northeast Indiana. … It’s been really exciting that they see the excitement and the potential,” he said.
“Attracting talent to this area is easier today than it has been in the past five years,” Byzyka said, adding that he hears similar reports from other employers.
“When I look at what is possible down the road for this area, when I look at broader economic figures … there is growth coming down the pike — the best growth in almost eight decades on a global basis. It’s hard not to be optimistic about that,” he said.
In the national picture, he said, “There is no prudential risk in the economy, whatsoever.” He defines prudential risks as those involving the banking system, consumer disposable income and companies producing earnings to justify their valuations.
Stock markets are riding at an all-time high, and “Whenever that happens, there tends to be this jittery feeling for many investors,” Byzyka said.
However, he assured, “The market levels are highly justified,” based on corporate earnings and expenditures by consumers.
Fears about inflation rank as “the most misunderstood topic for retail investors,” Byzyka said.
“It’s really important to point out that having 2-3% annualized inflation is one of the healthiest economic events that can happen,” he said. “We have not had healthy inflation increases in this country over the past 10-12 years.”
Recent reports showed inflation at a 4.2% rate, but Byzyka does not find that to be troubling.
“If we break down what caused that to jump, it was airline tickets and used car prices,” he said. “I don’t buy a used car every day, and I don’t buy an airline ticket every day.” Without those two factors, inflation was 3.1% to 3.2% — “a very healthy level,” he said.
“I would urge caution in assuming inflation will be a detriment to the market and the economy,” he said. “These are positive things we’re experiencing.”
The only major risks he sees to the economy are a COVID-19 variant that evades vaccine protection and “any marginal shock wave from the White House in terms of tax policy.”
However, any tax increase that seems likely to be enacted would not be a substantial negative impact to earnings for corporations, he said.
The message for individual investors, he said, is: “Don’t be afraid to remain invested. I think it’s very easy to fall victim to the notion that ‘surely the market must come back down.’ Stay invested. It’s always easier said than done, but stay objective. Take your emotion out of it. … Don’t make that rash decision” and “always follow your financial plan.”