Real estate, stock markets, and mutual funds have seen massive increases in the last three decades. Why?
Since peaking in the early ’80s, central banks have been lowering interest rates to grow the economy and increase wealth.
Source: FactSet. Data as of 12/31/17 [1]
Over 200 years of interest rate data tell us that interest rates move in 60-year cycles. On average, 30 years up and 30 years down. These historic low-interest rates are coming to an end.
Source: William, Ron. “Goldilocks & The Big Bond Bear: Deflationary Spike Risk Into 4%.” LinkedIn [2]
News flash. We are overdue to enter the next 30-year interest rate upcycle.
Serious inflationary pressure may be brewing due to the enormous debt and deficits currently being racked up by central bankers, forcing them to increase interest rates.
In this environment, bonds are at risk of losing money, and stocks are at risk of underperforming.
What has worked in the past may no longer work going forward.
The 7-year Asset Class Forecast below suggests that the longest bull market in history, (two decades) is coming to a close.
Source: GMO, Mauldin: The 60/40 Portfolio Is Riskier Than Ever[3]
Increased interest rates, elevated debt and moderate economic growth will put the typical stock, bond or balanced mutual fund portfolio at risk.
Uncertain times require different investment planning and forecasting strategies to continue strong, long-term returns.
You will need an advisor who understands the trends and looks forward rather than resting on past successes — one who understands the new market reality and will prepare you for this new reality.
For over 30 years, I have helped my clients make wise decisions with their investments. In many cases, I have helped them achieve their financial goals while helping them avoid the big financial mistakes that could have reduced their wealth.
That is why I wrote THE enclosed book on what a forward-thinking financial advisor can do for you.
Who’s Investing Your Money? – 7 Key Questions to Ask Your Financial Advisor is not your typical financial advice book. It examines the past and suggests future strategies for protecting your wealth from the COVID-19 Pandemic induced Financial Storm.
To learn more about how to protect your wealth from the COVID-19 Pandemic induced financial storm, please call me at (604) 855-6846 or email me at aspitters@pfcwealthsolutions.com
Who’s investing your Money is available as a free PDF download at www.whosinvestingyourmoney.com
Alternatively, the book is available from Amazon.ca as a paperback and Kindle version from this link: Who’s Investing Your Money? – Amazon
[1] “New Client Assets in Today’s Market: A Blessing or a Curse?” Paritas Capital Management, 6 Apr. 2018, https://www.paritascapital.com/blog/new-client-assets-in-todays-market-a-blessing-or-a-curse/.
[2] William, Ron. “GOLDILOCKS & THE BIG BOND BEAR: DEFLATIONARY SPIKE RISK INTO 4%.” LinkedIn, https://www.linkedin.com/pulse/goldilocks-big-bond-bear-deflationary-spike-risk-4-ron.
[3] “GMO 7-Year Asset Class Forecast: August 2019.” Home, https://www.gmo.com/americas/research-library/gmo-7-year-asset-class-forecast-1q-2020/.
