As 2019 unfolds, especially here in the early weeks, you will hear lots of chatter about many different risks:
- The endless number of things Trump will do wrong for some.
- The shutdown being just one of many in the latest list
- The myriad of economic risks we seemingly face (not new)
- Trade war chatter
The breathless description of of someway, somehow, in some manner – we will collectively fall short of “what experts tell us….” blah, blah, blah.
The list is endless – and the reason you know this is because there is always another item to add to the list.
Here is the deal: the most substantial layers of opportunity – and peril – ahead, will NOT come from being up to the minute on headlines about environmental risks, news on Ebola or other pandemics (real or fake), political shenanigan’s here or abroad, cultural clashes between the have’s and have not’s or other issue suggesting that somehow our society is breaking down and killing the shrinking middle class – it isn’t.
Indeed the most substantial likelihood of winning in the next 2-3 decades will come from a clear and concise understanding of one thing: Our Demographics.
Fact: We have the best growth demographics of any of the developed economies on Earth.
There is nothing wrong with our society. There is not a “shrinking” middle class – and there is no force out to get them. The reality is far simpler and significantly less diabolical.
Middle-age and middle-class represent the same group.
It just so happens that middle-age – those in Generation X – currently represent the smallest generation of the last 100 years.
THAT is why it seems small – it is small – all by itself.
The latest consensus warned that birthrates were shrinking. Indeed they have been. It is the tail-end of Gen X having kids. Note above! Gen X, the smallest generation of the last 100 years would be expected to produce a smaller number of births – no? Of course.
The good news?
Generation Y – the most significant generation to ever impact our economy is just getting their sea legs. They took longer – they stayed home longer – they got better educated and they got far more efficient than any work-force we have ever witnessed.
What will they do next? Uhh, let me think….?
- Finish graduating – flood the market – fill more jobs – get more done.
- Get better jobs.
- Begin having kids.
- Buy more houses.
- Build lives.
Where do you think the new 300,000 people showed up from in the blazing employment report from a couple weeks ago? Our hunch?
Graduates – and there are millions more coming.
A good thing given that job openings remain at record levels.
Oh – and This Correction?
Thank the Good Lord above that it arrived! In fact – pray it hangs around for a bit.
Why? Because fear is deeply-ingrained again in the mind of the anyone listening to the media hype day in and day out. Why is that good?
Simple – our hunch – based on past experiences is this: they won’t even sniff at stocks again until DOW 32,000 – 33,000…and then, only slowly. The mountain of fear is rebuilt. It is a YUGE wall to climb (no pun intended).
Our associate, Mike Williams, who some of you have met, did a little video here for you. Click on the image below – it is important to take a few minutes and watch (just click on the image)! When your video opens – your password is Faith77
OK – so click the image below…
Fuzzy right? I mean how in the world could watching your assets go down in value temporarily be any help at all? Try thinking of it as the tank of fuel needed to drive the market higher is being refilled.
Remember – and I know this is tough to conjure up in your mind – but markets are like brain waves on a screen. You can tell how everyone feels when you look at market action:
It really is human nature.
Investing is not about finance.It’s about how people act with money.– Mike Williams
Now, the stage has been set for some more chop – but after that – and it may very well last for a far shorter period than you might expect – the trek up the mountain continues.
I suspect 2019 will go down as one of those periods where courage will win out. Much like the naysayers of the flat years of 2015 and 1994-95 – the grand fear of a recession was clear: but in the end – it was a failed effort to make fear a reality.
Sure – like now – those times felt dark, felt like things were a bit shaky, felt like the news guys and experts had it right, felt like, “uhh, you know they may have a good point…”, etc., except it was wrong.
It took courage to stand tall during those times – it will take courage (and a truckload of patience) to stand tall against the current squalls in the media.
The water-fall-like December decline led to the identical behavior we saw in late 2008 and early 2009 as people fled stocks for life – and ran to the safety of treasuries.
Just weeks ago – shockingly – equity mutual fund outflows witnessed levels last seen around those 2008-2009 lows as investors rushed to “reduce risk”…for what?
Fear. Just fear. It felt scary – it felt bad – it felt “smart” and worst of all, they will stay scared until “the future becomes more clear.”
There it is – that age-old, magical, self-ordained crystal ball that everyone assumes they will have on their desktop – to tell them “when the future will be more clear…” again.
We already know when: when they feel better.
When is that? When prices are beyond new highs – and it feels ok.
By the way – translated = “I like my investments to cost more.”
In this new year – be bold, patient and courageous. The future is far brighter than the crowd collectively currently believes or expects.
Sure it stinks sometimes, for longer than we like in some windows of time.
But – here is the crappy part of the investment / wealth-building game: you must take the bad to get the good.
There is no short-cut, no fancy program, no magic potion to get you out and then back in all at the right time.
Do yourself a favor – make sure that you watch our latest educational video on “corrections” (linked to above & again here) – You’ll need a password, which is Faith77
Lets Talk… Soon!
Use this link to schedule a time to cone in for a personal review of your retirement and investment plan.
Until we see you again, may your journey be grand and your legacy significant.