2020 & Beyond. A time of unknowns and uncertainties.
This is a more complex situation than in 2008. Then it was a GFC based on deep seated financial problems. 2020 is about a virus. And scientists know little about this virus.
At FMG, our mission on this planet is to protect your wealth… so my first question is, do you have the right wealth and investment strategy in place for these very uncertain times?
As a busy professional or business owner, it can be hard to find the time to think about how well you’re protecting yourself, your family (and your business), but the consequences of failing to do so can be massive.
What are the current economic unknowns and uncertainties?
The uncertainty of this pandemic will drive the outcome of our economy and global economy. And at the moment, we could only guess what the outcome of this could be.
Our markets are looking fragile but the virus is looking anything but! So where will we be in 6 months, 12 months and beyond?
A second wave in the northern hemisphere as winter approaches is a real possibilty, even likely, so how will they deal with it? How will that affect us?
What does that mean?
2020 & Beyond – Investors beware!
The federal reserve won’t save us and neither will our government. They will do what they can, but they only have so much capacity to obtain ‘prop up’ funds for us. If our government runs out of $US collateral – hold onto your hats! There are limits. And there are risks.
Preparation is key here. For us personally, it is important to get YOUR ‘ducks’ in place! This applies to us as a nation, and as part of a global nation. As the government spends more to assist us, it will in turn affect its financial flexibility in 2020 and beyond into the future.
Long Term Protection
Long term protection is probably questionable right now, so getting your financial house in order right now, reviewing it regularly, and then being adaptable with the ‘knowns’ at that present moment and making good decisions based on the known knowns is essential.
Very Early Days
The economic uncertainties are compounding. We don’t know the extent of the damage of this virus on our economy right now because of the stimulus programs. Because of that, we don’t know what the real level of unemployment is?
All the people being paid job keeper may well have been laid off if the government payments weren’t available. Those people are not in the unemployment statistics and we don’t know what percentage it could have been or will be in the future.
We don’t know if thee people will be employed in the future, how the business will react, change, or adapt when payments cease. We don’t know the bankruptcies ahead? The bank’s are deferring repayments. What will happen when these are reinstated.
The Calm Zone
It’s almost like we are in a lull at the moment. We don’t know the duration of help, the pandemic, and the effects on us here and globally. What is ahead 6 months, 12 months, and beyond 2020?
For us, it feels calm right now. But it is a bit of a false economy. If the virus accelerates and continues, the US Federal Reserve will be very reluctant or won’t be dishing out money to other countries. They will be protecting their own butts & home-based assets.
If we get more market stress later this year or into next, the lending markets will impose limits because of the risks. Because of the virus! And if investors get scared and run, that could trigger a major downturn. Precarious is the world right now.
Could Markets Collapse?
The truth is, we don’t know what will happen and what will happen in the foreseeable future. We could have a benign outcome and no crash.
If we handle it well, we get a vaccine, markets could coast along and maybe even grow. But bare in mind there was never a vacccine for aids, SARS et so don’t hang your hat on that happening. Good if it does happen, but it could still be unlikely, Then what?
At the moment our enviroment feels okay, but we really don’t know what is going to happen in the foreseeable future based on all the points previously highlighted.
Uncertainty is definitely our NOW.
So, invest well, change while you can, lower your risk, and protect yourself.
Looking at your ‘Whole Wealth’ health and making decisions based on your risk profile is even more essential than ever before. Good advise has never been so important.
Remember, the action is power!
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Disclaimer: This article is information only. It is not intended to imply any recommendation about any financial product(s) or to constitute financial or tax advice. The information in the article is reliable at the time of distribution, but may not be complete or accurate in the future.