Within the last few years we’ve experience a major cross over between politics and economics. Is this a good or a bad thing? Many economists believe that more political intervention can negatively affect the natural growth of the economy. While others believe that the U.S. could not have survived the 2008 “great recession” without the government’s assistance. Nor, would we be able to sustain future growth unless we continue to have the governments support.
It’s obvious that our global economy is more involved politically but how much do we rely on our government relationships and policy to control our economic growth. I believe our society understands that we need government support in many aspects of our economy but when control becomes a liability, it certainly poses the question of when should the government pull back? As much as we rely on monetary policy to tighten or loosen our money supple, hence, increase or decrease growth in our economy, the political party battles is becoming more of a distraction. Hopefully, decisions that need to be made will be address in a responsible manor and actions will be taken in affect.
Recently, the United States government shutdown for the 18th time, this is primarily due to political party differences. Yet, another political battle between the Democrats and Republicans spark uncertainty in the markets. Although, government issues don’t seem to be directly affecting the markets at this time, it can influence institutional and individual investors to re-direct strategies short-term. Events such as this have become an ongoing concern and come October 17th we may have another issue regarding the debt ceiling. These political disagreements hopefully will begin to focus on what is needed to improve our society and economic environment. Rather than continuing to use situations such as these for political gain and finger pointing.
As a financial advisor, I meet with my clients on a consistent basis to review their accounts and investment strategies. During the last few years, I’ve noticed an emphasis on our changing government environment of the U.S. and less on saving properly for the future. There has been so much noise about political and economic issues that we’ve missed some of the fundamental ideas of saving for retirement. Changes such as healthcare, entitlement benefits, inflation, and life expectancy are a major aspect of planning, but without having a responsible strategy of saving many investors limit their success for retirement.
Hopefully, as we move forward, the media, investors, and educators will focus on the importance of actions and responsible saving strategies. Working with clients, I find that having a well diversified portfolio that fits ones investment risk and time horizon is critical. However, continuing to stay focused on investor’s objectives through political and economic uncertainty has been more challenging within the last few years.
Michael Cochell is associate vice president at Jacob Gold & Associates Inc. This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decision