Underestimate the U.S. Economy at Your Own Risk | The Mesh Report

Underestimate the U.S. Economy at Your Own Risk

Dividend Sensei January 4, 2022 Comments Off on Underestimate the U.S. Economy at Your Own Risk

By Ben Carlson

A number of years ago I was sitting in the conference room of a nice hotel pitching two very wealthy brothers.

They were interested in investing with our firm but were unsure about how our strategies would hold up. Actually, they were unsure about how EVERY strategy would hold up.

These rich gentlemen were worried about massive government debt loads, the potential of defaults on that debt and how it could bring down the entire financial system as we know it.

We went back and forth with them for hours covering historical market scenarios, which strategies worked and didn’t work at certain times and how to create a durable portfolio that can work under a wide range of outcomes.

No matter what we said they simply couldn’t become comfortable with how risk assets would perform under a number of awful left tail market crash situations. Alas, they couldn’t get over the fact that every single investment comes with risks.

Unfortunately, after diversifying and creating a plan that fits within your risk profile and time horizon, you have to take a leap of faith, accept the inherent uncertainty in the future and then follow your plan come hell or high water.

At a certain point, you have to have some faith that things are going to be better in the future.

This is something the wealthy brothers simply didn’t believe.

If things don’t get better over the long run, what’s the point of investing anyway?

Yes, bad things can and will happen. There will be recessions, wars, pandemics, natural disasters and who knows what else. Bad stuff has always happened and will always happen.

That’s just the world we live in.

Yet even when you include the bad stuff, the progress we’ve made as a species over time is magnificent.

Kenneth Pringle at Barron’s recently shared some amazing statistics about the resiliency of the U.S. economy…

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