2017 – The Times They Are a-Changing.
2016 was a momentous one. The stock market’s reaction to Brexit and the election of Donald Trump as president of the US and in literary circles, the choice of singer-songwriter Bob Dylan for the Noble prize for literature was no more obvious.
But reacquainting myself with some of his old songs, penned several decades ago, his lyrics are as apposite today as they were back then. His 1964 album, “The Times They are a Changing’” could not ring truer.
We have witnessed a rise in political populism, a distrust of globalisation, and utter disdain for establishments and ruling elites who claim to be self-styled experts and no better than anyone else of how to “fix” the economy… need I go on?
So, just how will this shift from the elitist central bankers to ordinarily working people who have seen real wages eroded since the onset of the financial crisis and their roles displaced by the relentless march of technology – pan out?
President-elect Trump’s promotion of pro-growth policies, with the promise of a $1trn fiscal injection over five years, is designed to restore the ailing fortunes of America’s coal, steel and manufacturing industries. It will also go some way towards ending a decade of financial manipulation, negative interest rates, deflation, austerity and, more especially, the role of central bankers.
As Bob Dylan put it in his 1968, hit “Nothing Was Delivered.” “Now you must provide some answers, and the sooner you can come up with them the sooner you can leave.”
A tad harsh perhaps, but the role of central bankers as key decision-makers acting completely independently of democratically elected governments is now open to question.
For 2017 The effect on stock markets is manifold. The rise in inflationary expectations, which has resulted at long last in an upward sloping yield curve is good news in so many ways. For the financial community, it could potentially restore banking profitability which is the lifeblood of economic activity.
For the business community, it means entrepreneurs can start to invest with greater confidence, knowing what their genuine cost of capital is likely to be. For the saving community, at long last a better return on hard earned savings. I think at best, we can say, let’s watch this space!
Uncharted Territory for 2017
Wow, how many of us really have the time or inclination to understand any of the above?
If we are honest very few of us really understand the vast number of different investment products, life insurances, income protection, pension policices, mortgages, savings schemes, let alone how much income tax we should be paying or to even consider what the best options are to suit our particular objectives.
To do this effectively it would need to become a full-time job. However, how many times have you heard the saying “you only know what you know?”
With the busy lives we lead, it can be difficult to find the time to keep fully up to speed with the financial markets and everything that is going on, including managing our ever-changing financial affairs, especially as we are unlikely to remain the same throughout a lifetime. This is where professional financial advice can prove invaluable.
Need to talk, we can help you design a custom Lifestyle Financial Plan tailored to suit your individual situation. It should take into account your financial goals, as well as your need, willingness and ability to tolerate risk.