While the decision voters make in just a few days has the potential to launch the economy on a path of economic growth, it is possible and perhaps likely that the next several years will be financially unrewarding.
The American people today are in a bad way. The labor force has shrunk, household net worth has shriveled, we’ve added trillions of dollars to our public debt burden. Even with the optimal economic policies, economic pain is likely to be with us for some time to come as personal and public budgets are cut.
And while, amidst a stagnant economy, the stock market has soared this year, a lot of the gain has resulted from Federal Reserve policy decisions; it’s not called “easy money” for nothing. But whether through regime change at the Fed or the reemergence of inflation, money is likely to get tighter in the coming years.
Financial advisors can prepare for a period of lean investment returns through a defensive and diversified portfolio: managed futures, gold or currencies might provide a little extra zig for the zag of stocks.
But the key insight investment advisors typically offer clients is the notion of buying low and selling high. We live at a time when the economy ranks as Americans’ top concern. According to Rasmussen Reports, voters for years have ranked the economy as the most important issue in their electoral decisions, far above concerns such as health care, government ethics or foreign policy.
Indeed, the economy has become an obsession. Economists now are somehow cool, some of them are household names and economic blogs proliferate. But all their gnashing of teeth, handwringing, overly confident forecasts and policy proposals are not likely to bring us prosperity in the near term.
From an investment perspective, now may be an excellent time to sell the economy and buy one-on-one personal engagement with those who need our help. Has a client lost a job? Use your network to help him find another.
Are your clients the parents of recent college graduates? Half of this year’s graduates are unemployed or working in occupations for which college training was unnecessary. Offer a class called “Learn to Earn” that will impart lessons in financial literacy, work habits and networking—all things advisors have expertise in. Then hire the most impressive students as paid interns.
Looking for volunteer opportunities? The unique problems of a client, family member, neighbor or friend, can point you in a direction where you can make a powerful difference in a person’s life—even while the economy takes time to recover from its malaise.
Opportunities in the stock market may not abound, and their payoffs, depending on sale date, taxes and other factors, are uncertain. But helping, teaching and growing are sure things, and you can get in on the ground floor while your competitors look for crumbs in a lean economy.