Investors should be optimistic at the current growth, because after the last recession the economy had a lot of rebounding to do. Investors are finally making up their minds to invest and make some money again. There is no sign that there is another bubble that needs to be burst. We should be celebrating.
Investing is more of an art than a science, in that, there is no way to determine 100% outcomes. However, investors should be able to look at substantial and sustained growth in earnings as a positive indicator and continue to pursue those avenues assuming that growth will continue, remain, or, should there be slight loss, that they would be able to re-evaluate with enough time. It is impossible to take any risks if one is consistently assuming the worst possible outcome. Although, I would recommend investors spread their resources in case of an unexpected downturn, I would not say that it is a reason to not invest when all other signs, including growth in earnings, are pointing to a continued investment.
If you look at the majority of periods of economic upturn in any given country of period of time, it is pretty much guaranteed that a period of economic downturn will follow. Investors should focus less on the amount of wages but focus on what people and companies can actually afford. Just because the amount you earn is going down, doesn't mean you are necessarily losing out because of inflation, as the value of the money may be increasing. The same could be said for the opposite, while your earnings are increasing, the value of money is decreasing. This is usually a bad thing.
Inflation can drive earnings upward in terms of nominal dollars, while in fact the purchasing power of those earnings can be less than before. It is prudent for investors to be mindful not only of the overall inflation rate but also of inflation rates specific to the company's industry or market.
The economy is flat because no one has any money. The 1% are holding it all so I'm not certain why people expect the economy to soar when people don't have any buying power. Wages are low and have remained stagnant for well over 15 years now. I can't even find a job that pays over minimum wage so I couldn't care less how many retailers want me to buy, buy, buy. It simply isn't possible