Imagine a farmer hitching his horse to plow a large field. The horse likely starts off strongly, at a quick pace. As he works his way back and forth across the field, with the sun rising higher in the sky, the horse will lose energy. Towards the end of his work he’ll be tired, but continue pushing forward, slow and steady. That’s what’s going on with the current economy: pushing forward, albeit slowly.
If you ask the average American how the economy is doing, the majority would likely just shrug. The most reported statistics are in many cases very misleading. According to the most publicized economic statistics like unemployment rates and the housing market, the economy is still growing, however at a slow what we call a plow horse rate. What does this mean for your investments, especially the money you’ve put towards retirement?
Economists break down the fiscal year into quarters then analyze data from each quarter. According to the National Bureau of Economic Research. In the six full calendar years since 2010, real annual GDP growth has never exceeded the 2.5 percent it hit in 2010, with quarters offsetting one another as slower or faster growth. Hope ensues for continued growth as consumer spending has recently been steadily increasing. However, some analysts are still worried about the decline in investments. It appears people are afraid to invest in this plow horse economy. The rate of real economic growth is the single greatest determinate of both America’s strength as a nation and the well-being of the American people.
Corporate profits and general consumer spending is up significantly since 2008, meaning there is money to go around, so why aren’t more people investing? Investing, especially with diversified moderate risk, allows investors to make their money work with moderate chance of losses over time. Saving long term, like for retirement, may be made easier and more successful through investments. Investing may result in additional funds through dividends which then can be pulled out or reinvested. Over a longer period of time, compounding can work its magic, resulting in even more returns.
A financial advisor can explain options tailored to your financial goals. He or she can advise if whether keeping funds steady is the best option for your current financial situation and goals. Some investors may become unsettled with daily economic polls presented on news shows, prompting them to shift and rearrange financial portfolios on a whim. A reliable advisor may alleviate that emotional reaction by listing options backed by more data than the news shows present, the porpoising of the markets is normal. It’s very likely an advisor will recommend remaining steady, just ride the plow horse.
Oftentimes saving for retirement occurs over many years. In the long term, the good and bad years will likely minimize extreme gains or losses.
Whether you have a dollar or a million dollars in your retirement account you will be able to explore the value of a real advisor simply by visiting the Self Directed Brokerage Account advisor contact site. From this site you can begin to take advantage of the features of your retirement plan. If you wish you can also download a fact finder sheet that can be used to create your personal retirement financial plan
*Past performance is no guarantee of future results. All investing is subject to risk, including possible loss of principal. Diversification does not ensure a profit or protect against loss in a declining market. Dividends are not guaranteed and are subject to change.
To learn more about Rick Willoughby, view his Paladin Registry research report.
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