Retirement Planning

Statistically, very few Americans actually have much money in the stock and/or bond markets. However, those that do need to be wary of the signs that the markets are sending lately.

The truth is that NO one knows what is going to happen tomorrow in the various markets around the world. The talking heads on TV give their opinions but they don’t really know the future. However, there are certain fundamental rules that need to be observed by anyone who is an investor in those markets.

1. The markets will eventually go down. The important factor for everyone is to have a specific plan for what you will do if the investments you own start to lose value. Holding on may have made sense many years ago, but today?2. Recessions come along every now and then. How would a recession impact your investments? Are there things you would do if you had cash on hand during a recession. Would it matter to you if the recession were mild or severe?

3. How does the unemployment rate effect the U.S. economy? When people are out of work they spend less money. When consumers spend less money the economy generally slows down. How will that impact your investments?

4. Politicians often do the wrong thing, or they do nothing at all, which can be worse than doing the wrong thing. It is clear that the current U.S. Congress is almost totally dysfunctional. They can’t seem to figure out how to work together. Why is that? The answer is actually quite simple, each major political party is controlled by several special interest groups. Those various special interest groups have totally different agendas. It is all about the money!! The politicians need it to get elected and then re-elected. Period!!!

5. When will the politicians in the U.S. Congress find a way to work together? The answer is that when there is a real crisis they must act. That does not mean what they end up doing is going to be good for most Americans. It just means they will act. The left leaning politicians will look for a solution that involves more government intervention in our lives. Theoretically, the right will look for solutions that give us greater freedom of choice. Sadly, the reality is that both the Democrats and the Republican leaders in the U.S. Congress actually are in favor of bigger government. That fact should be incorporated into your strategic planning.

6. Each American needs to be involved with their politicians in order to protect the future of their family. If inflation comes roaring back that will hurt people on fixed incomes. On the other hand, deflation will hurt other people.

7. Each family leader must have a specific way of dealing the future. That plan should be reviewed with the family financial advisor(s). Periodically, the plan should be updated.


Categories: Retirement