ROI: March 2020 Economic Report Volume 35 | Page 3

The Great Recession left emotional scars that created a new willingness among many Baby Boomers to keep costs low and incomes high. A recent Prudential survey showed over half of those aged 45 to 75 were forced to delay retirement because of the recession. Even those who can afford to retire will probably keep working in some capacity especially considering the median household income has only risen 3% since 1999. Chew on that dose of reality for a minute. Meanwhile, all too many others have fallen off the radar as their skill sets are no longer warranted. We can see why as the top 5 vocation trends are: •  Artificial Intelligence Specialist •  Robotics Engineer •  Data Scientist •  Full Stack Engineer •  Site Reliability Engineer Then there is consumer confidence. Two-thirds of the U.S. economy is based off consumer spending, so growth relies heavily on how willing consumers are to spend. Consumers’ sentiment softened throughout the latter half of 2019. Volatility in financial markets caused by the trade wars and tariffs remind us that upper and middle-income households are notoriously sensitive to swings in equity prices and that slows the pace of spending. Then again as Fed Reserve Chairman Jerome Powell stated recently the consumer sector has been quite resilient and interest rates are low enough to boost the economy in a way that will help sustain the expansion. Powell continued his assessment stating “we know that manufacturing, investment, trade, the export sector has been weak. That continues, but nonetheless overall, we’ve got an economy that is showing moderate growth but there are really no recent precedents to guide any policy response to the current situation.” That statement was reassuring wasn’t it? I believe that translates into we don’t have the right tools or enough tools in place, both in fiscal and monetary policy, to handle a sharp recession. Perhaps the Fed can soften any impact, but that light at the end of the tunnel may very well be a freight train they can’t stop. I asked you to stay with me so here’s the point, headline driven scare tactics cause short term dips, yet those who stayed the course rebounded in each instance with market rallies to even higher highs. There’s an awful lot of smart people out there that do dumb things with their money, specifically, trying to “time the market.” You truly do have a better shot in Vegas or the Lotto than trying to time short- term market movements. In doing so, you make investment decisions based upon emotion, your own biases, and blind spots. As I eluded to earlier, we are nearing the ceiling and while it may take a year or two to get there, it may be a good time to start preparing for the end of the business cycle. For consumers, that means paying down high-cost debt, boosting your emergency savings and identifying ways that you can cut back in the event of a sudden loss of income. My brother in-law retired at 57 with a simple plan in place to be retired longer than he worked; he’s 87 now and getting closer to his goal and doing so comfortably because he stayed the course and added predictable, secured income to his retirement plan. So, let’s keep things simple, instead of trying to game the system, pause and remember, the key to long term wealth building and staying ahead of the market will depend on your ability to construct a portfolio consistent with your objectives, timeframe and risk tolerance. We believe adding a predictable component secured by tangible assets allows you to offset the market safely and profitably in any economic climate. Certainly, if it were easy to call the tops and bottoms, no one would ever lose money. But being sensible about your own financial situation has nothing to do with market timing. It is all about managing risk. If you’re just starting out, a plan of regular investing regardless of market headlines is a winning strategy over the long run of at least 20 years. However, if you’re approaching retirement, you simply can’t afford to lose most of your nest egg, or even half of it so don’t fall for the scare tactics of any one-time event. While the U.S. economy isn’t a fast-growing economy, it’s a stable one. Let us know your thoughts or questions after you review Chief Economist Dr. Young’s findings reported inside this latest edition of ROI. Send your comments in to info@ hisrealestatenetwork.com and don’t forget to tell us what else you would like to see in future editions. We hope that our report becomes a part of your regular diligence process and should you have any questions about it, or would like to discuss our 40-40-20 plan and how we may add stability and profitability to your portfolio, contact us direct @ 877- 452-6569 or via [email protected] and put Mail-Box Money in the subject line. Until then repeat this mantra: I’m a long-term investor and will not fall into the trap of thinking I can time the market. I have adequate emergency reserves and a diversified portfolio that will allow me to sleep at night. www.hiscaptialgroup.com 3