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A list of Dan Richards’ previous articles appears at the end of this article.
These days, few issues are more important – or divide investors more – than the outlook for the U.S. economy.
There’s no question that the U.S. faces formidable issues. Among these are persistently depressed housing prices, the quality of some of the mortgages still on banks’ books, consumer confidence, unemployment, the plummeting dollar, trade deficits, massive unfunded entitlement liabilities, record budget deficits and debt levels that will require foreign investors to continue to buy U.S debt.
Furthermore, with an increasingly partisan and dysfunctional political gridlock in Washington, it’s hard to marshall much confidence in the leadership on these problems from Capitol Hill.
In light of this daunting list, it’s easy for clients to feel overwhelmed by the bad news.
And yet that’s precisely where advisors have a key role to play.
Advisors provide the greatest value by being an emotional anchor for clients – keeping the highs from being too high during times of untrammeled optimism, such as we saw in 2000, and the lows from being too low during periods of absolute pessimism, such as we saw a year ago and in many cases still see today.
Playing that role takes more than just having an opinion – you need credible evidence to back you up.
That’s where recent columns from two of the New York Times’ most respected columnists can play a useful role.
Thomas Friedman is winner of three Pulitzer prizes and author of The World is Flat, the 2005 analysis of the impact of the globalization.
His April 6 column focused on what it will take to build a bridge for the American economy into the 21st century. Here’s part of what he wrote:
“Obama-ism posits that we are now in a hypercompetitive global economy, where the country that thrives will be the one that brings together the most educated, creative and diverse work force with the best infrastructure — bandwidth, ports, airports, high-speed rail and good governance.
And we’re in a world with a warming climate that is growing from 6.8 billion people to 9.2 billion by 2050, so demand for clean energy is going to go through the roof. Therefore, E.T. — energy technology — is going to be the next great global industry.”
