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.