Investment Risk-A Matter of Great Importance

Your Future Small

Are You Concerned About Your Level of Risk in Your #Retirement Plan, Your Son’s and Daughter’s #Education Fund and Your #Investments in Your Personal Accounts? As Volatility Rises and the Markets React to Geo-Political Events Two Camps of Thought Regarding the Direction of the Markets Have Emerged.  Doomsayers such as Mark Faber and Others Predict a Dramatic Market Drop Coinciding With the Unparalleled Increase in US Debt. This Doomsday Scenario Calls for a Severe Market Drop, Dramatic Increases in Unemployment and High Inflation.

On the Other Side of the Coin a Bull Market Case is Being Made Which Advocates That a New Leg of the Bull Market is Taking Shape Based on an Improving Job market, the Strength of the Underlying Economy and Inflation Close to the Fed’s Target of 2%. Therefore, the Federal Reserve Has Been Able to Taper Back the Stimulus of Quantitative Easing Which Has Propelled the Huge Run up in Asset Prices, Which in Turn Has Also Helped Fuel the Economic Recovery. This Bull Market Case Asserts the Accelerating US Economy Will Lead the Fed to Raise Short Term Interest Rates Further Validating the Economic Recovery.

The Degree to Which the Markets Meteoric Rise Since We Hit the Depths of the Financial Crises in 2008 and 2009 Has Helped the Country and Whom is Still Up for Debate. However, What has Been Missing From the Equation Since the Country’s $800 Billion Fiscal Stimulus in 2009 (Which Many Credit for Breaking the Financial Free Fall the Country Was In) Has Been a Coherent, Integrated and Coordinated  Fiscal Response by Congress and the President to Combine with the Monetary One. Gridlock Over the Direction the Country’s Policies Should Take Persists as We Enter the Mid-Term Elections This Fall. Yet, One Could Argue it is Precisely This Gridlock Which May Have Acted as a Brake Upon the Democrats From Creating a Budget Large Enough to Overwhelm the Country and Prevented the Republicans from Legislating Austerity Which May Have Created Another Great Depression. Thus, Allowing Enough Resources to be Allocated to Deal with the Problem without Going over the Brink.

Enclosed Below are Two Articles Which Illustrate These Two Opposing Streams of Thought. Are the Markets Over Leveraged to the Point Asset Valuations are Unsustainable?  Or is the Country on the Road to Long Term Recovery and Therefore Requires Your Participation in the Markets to Achieve Your Financial Goals

I am Interested in Hearing on What Side of the Debate You Fall and How I Can Help?


Lou Wolkenstein

Managing Principal
The Investment Advisor

570-815-0770 Cell

570-299-7416 Office