Financially speaking, we’re living in unprecedented times.
The stock market’s been on a roller coaster ride for the past few years. Inflation is at the highest levels since the 1980s — yet interest rates remain extremely low.
If it seems like these conditions make it harder to save, you’re right.
But it’s not impossible. Keep reading to learn why wealth management has become so challenging — and learn three vital tips to maintain a winning portfolio.
Wall Street and Main Street: A Not-So-Conscious Uncoupling
The value of stocks — and the stock market — used to be driven by earnings.
Not anymore. Wall Street and Main Street have decoupled.
These days, the markets are mostly being driven by what the Federal Reserve does. Unfortunately, what they’re doing is creating money out of thin air.
Our country is printing about a trillion dollars a year — then turning around and lending it to ourselves to artificially hold interest rates down.
We’ve never been through a time in history when there was so much financial intervention in our markets.
We’re also in the biggest period of inflation since the early 1980s. Unlike back then, we don’t have Paul Volcker (Chair of the Federal Reserve from 1979 to 1987) to raise interest rates and stave off inflation.
A Big Problem For Those Who Want to Save
The current conditions of our financial markets have made it extremely hard to save money.
They can’t take advantage of higher interest rates in inflationary times.
So doing something like saving in a CD at 1% when inflation is at 7.6% … it doesn’t work anymore. You can’t keep up.
So where can you get the kind of yield on your money and still have safety that people headed toward retirement or who are already in retirement really, really need?
Here are some crucial tips for wealth management during these unprecedented times…
Wealth Management Tips
To have a winning portfolio, you need to have three elements:
- Income: You must be set up for income — either now, or in the future.
- Growth: You need to have growth to cover that income and grow your portfolio.
- Protection: You need protection against the black swan events that we historically know will come — market crashes and corrections, wars or rumors of war, and so on.
It’s not possible to go hide your money under a rock or to have low-interest yield accounts if you want to keep up with inflation. You must be set up for growth and protection.
Not sure how to get started? You’re not alone. It’s tough navigating the current market conditions as an individual. We’re here to help.
Do you understand why a winning portfolio needs these elements? How do you feel about wealth management during these unprecedented times?