Confidence Rules
The economy is expanding and one reason is fewer regulations. With less red tape, businesses are freer to spend money. Currently their spending, a key driver of GDP, is outpacing overall economic growth this year. Investors may want to consider this significant change when constructing their portfolios.

  • The number of hours spent evaluating and submitting paperwork for government regulations has declined in 2017 and 2018 after increasing 68 million hours on average from 2007-2016.

  • The decrease in paperwork has been driven by a decline in significant federal rules, which last year amounted to less than a quarter of the average during the prior decade. Additionally, the percentage decline in the number of pages in the Federal Register last year was the largest in over half a century.

  • The result has been less anxiety about federal regulation on the part of business leaders. A few years ago, about a quarter of businesses surveyed by The National Federation of Independent Business believed government regulations and red tape were the most important problem they faced but now that number is less than 15% of survey respondents, who report bigger issues such as labor quality.

  • Consequently, investors may consider positioning their portfolios toward companies that sell products and services to other businesses.

The views expressed are the views of Fred Alger Management, Inc. as of December 2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares. 

Risk Disclosure: 
Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Many technology companies have limited operating histories and prices of these companies' securities have historically been more volatile than other securities, especially over the short term. Technology companies may also face increased competition, government regulation, and risk of obsolescence due to progress in technological developments. 

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