UnbridledSubmitted by RetireWiseCFP on January 12th, 2018
The American economic locomotive is before our very eyes becoming more and more unbridled, set freer by fewer regulations and lower corporate taxes. I think most people do not yet fully realize the extent of the vast opportunity and compounding potential for the economy.
Where are we now?
For over a decade, through the presidencies of George W. Bush and Barack Obama, we have talked about the trillions of dollars parked overseas by American companies that should be brought back to America to create jobs and fix our infrastructure. Guess what? This nation accomplished that just a few weeks ago. My friends, this is a BIG DEAL! It is so BIG and so consequential that most analysts and pundits still don’t fully comprehend it. The fact that large multi-national corporations can now bring back money to America at low tax rates is going to have a profound and lasting effect throughout our economy over the next 3 to 10 years, not 3 to 10 quarters.
Where do we go from here?
We keep our eyes focused on the prize. Yes, there will be the inevitable stock market hiccups in the coming months; and the naysayers (I call them dream-stealers) will come out of the woods and tell you “Sell everything, for the end is near.” No, we will keep marching forward unless economic data show a recession.
On fixed income and alternatives:
I expect two to three rate increases in 2018 as the economy continues to perform. That just means things are going well: rate increases keep the economy from overheating.
On Bitcoin: I have taken a few calls and spoken with clients regarding Bitcoin. I don’t have an opinion at this time, but I am watching events develop. As John Lennon wrote: “I’m just sitting here watching the wheels go round and round, I really love to watch them roll.”
What should we look out for?
Simply, keep sane: avoid the pernicious diseases that seem to be affecting many people in America today. The political drama coming out of Washington is NOT the same as economic policies and reality—the American economy has a lot of good things going for it in 2018. Therefore, we should invest according to economics and not react to political bloviating.
To be very clear: an unbridled economy is not a license for undisciplined or unwise investment decisions. I still invest with disciplined action and prudence—we are merely getting into 2018 with a bit more bounce in our step.