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July 2, 2019
Welcome all of you to our summer 2019 client event !
What an interesting time it has been – an economy that has had a long run.
Recently, the Wall Street Journal had an interesting article about the economy – written about how we tend to just measure it based on the price of things, and how many of us focus on housing and land, and whether we and our friends are employed. Economists call this “Consumer Confidence” – how the public feels about how well they are doing and how positive they are about the future.
Yes, it has been almost ten years since our GDP regained its positive footing. Perhaps we ought to be thanking our lucky stars it has lasted this long. One political party claims that our current president inherited a robust and growing economy, while others speak to its rather lackluster – slow recovery from the worst recession ever, and claim only the latest round of tax cuts and deregulation has gotten us where we are today.
Yet, although unemployment rates continue to fall, real wages are rising. The experts believe that we may be heading to another slowdown. So much so, the Federal Reserve is very publically whispering that interest rate reductions are likely in the offering this year, perhaps two. We are being told that the market has already factored that into its pricing.
What has caused the markets to tighten and long-term interest rates to fall? Not so much based on what has happened, but what bad things may occur. After all, inflation is low, so interest rates don’t need to climb to battle price increases. A big plus is that the United States, is a net exporter of energy – less reactionary to increases or decreases in oil prices and supply.
What are the economists concerned about? The trade war with China and India and potentially with Mexico, the continuing uncertainty in the Middle East –lately specifically with Iran—and the bombing of the two oil tankers in the critical shipping channels and the downing of the drone. Oh, yes, perhaps Brexit and some slowing of other global powers – Venezuela, Central America, etc.
However, the current U.S. expansion has some trends going in its favor. Unlike the 1970s and early 1980s, inflation is low, taking pressure off the Fed to raise interest rates. The U.S. has become a large exporter of oil, making it far less susceptible to another oil price shock. Productivity growth is accelerating after a long period of dormancy, and a strong economy is drawing workers into the labor force.
Yet, I recall from my macro economics class more than 40 years ago, that economic cycles occur naturally. Thus, is it inevitable that all good economies must come to an end— after all, our current run is about to break the all-time U.S. record for the longest quarterly GDP growth.
It surprised me to learn that it is not inevitable (not to say unlikely). Australia has currently enjoyed 28 years of continued economic growth, and the UK and other European nations, have had at least one period of over 15 years of growth since WW2. So, who knows?
So, as investors, what do we pay attention to? The latest numbers from the Orlando Regional Realtor Association, or the Ten year Treasury and the inverted yield curve?
Well, in the room today, we likely have about 200 differing opinions on politics, policies and investment strategies. But one thing is inevitable – the likelihood that twelve months from now we all be another year older, and hopefully financially another year closer to retirement – or further into retirement.
Regardless, we have to invest – whether the market is strong, or faltering. Most of us realize that sitting on the sidelines for any length of time is risky, even more than reasonable investing. Thankfully, self-direction gives all of us the broadest range of choices, and that in and of itself can cause paralysis.
I just returned from vacation with my family. I had the opportunity for the first time to visit the Grand Tetons, Yellowstone and Glacier National Parks. It was amazing, watching busload after busload of foreign visitors disembark—sure didn’t seem like the world economy was suffering. I get a chance to speak to complete strangers about what their retirement dreams are – and seldom do I hear anyone speak of their future with great confidence, even those that have the economic means to travel. Yet most do not do anything about it except to cut back on their expenses and save more – rather than investing themselves more wisely.
Just yesterday at our upstairs conference room, our team members were meeting with a couple of software vendors. At a break in the meeting, I inquired whether they understood what a self-directed IRA really was, and why people choose to move out of the stock market. After calling on probably 20 self-directed companies, they admitted that no one had taken the time to tell them. So much to the dismay of other NuView team members, I launched into an explanation of the 5% – as that has always been the estimate of the number of IRA owners that choose to invest their retirement outside traditional markets. The interesting thing was that both men had grey hair and were probably within 5 years of my age.
I tried to explain what the typical NuView investor looks like – an over abundance of doctors, lawyers and airline pilots – and others that have an unshakable belief that they will do better deciding for themselves, rather than being dependent on stock pickers. It also includes those that hate traditional markets, and those that are drawn to potentially higher yields with lower risks attached. The idea of self-direction is especially intoxicating to those that love real estate of all shapes and sizes, and financing as well. Basically, it’s about people that don’t follow the crowd – the 5%. It’s for people that want to retire well, or certainly better than what the traditional market provides.
Most financial advisors help clients look at their retirement this way. Make your money last until you die. If you are healthy, it may be difficult. However, many of our clients think differently. They want to have their assets actually grow during their retirement and leave it to their children or a charity.
After my impromptu presentation to the software vendors, the founder of the company stood up and gave me his card and said, “I never understood self-direction that way before!”
Congratulations to those of you who have taken an active role to make your retirement more certain. The power of making your own choices has been the driving force of NuView’s growth for almost 16 years!
Now the lifelong learning must continue. Look at your investment strategy and see if you should expand your horizons. Success is never guaranteed – it certainly hasn’t been for me, or for you. Think about new asset classes – perhaps secured lending, structured settlements, business start-ups, partnerships, joint ventures or perhaps even a foreign resort property.
I have found that the key for success in investing is curiosity. Most people that invest outside the traditional markets, tend to be very open about what they do and how they do it – it’s just that not many people ask, beyond a normal “oh, that’s interesting”.
I’m blessed to be around many curious people, and sometimes they drive me a bit crazy – “Why can’t I?” “Are you sure?” “How can I?”
For those of you that have not made the plunge into self-direction, or are just getting started, don’t despair or overthink the process. We have conferences almost every week at our office, and most are broadcast live and are available on Facebook later. There are lots of resources on www.nuviewtrust.com. Never hesitate to call us anytime with a question, or how to initiate an investment – we are happy to help!
Don’t forget that our biggest event of the year, Planning for Prosperity – the 6th annual – is on Friday, October 25, packed with an incredible slate of all new speakers on how to supercharge your retirement.
Thanks again for being a client of NuView, whether right now, or in a week or two. We are watching your numbers grow, and collectively, your retirement looks better than ever!
God bless you!