The Asset Allocator: A 3-Step Path To Recovery (Podcast)

Apr. 02, 2020 7:00 AM ET1 Comment3 Likes
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SA For FAs
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Summary

  • Investors were slow to understand that this is not the sort of crisis from which we could expect an immediate and sustained V-shaped snap-back.
  • The path to recovery consists primarily of these three things, each in its turn:
  • First, any good news, of an enduring nature, depends on the restrictions that are slowing the progress of the coronavirus.
  • Second, increasing spending and reducing taxes, plus relaxing regulations, are needed to keep businesses and households viable.
  • Third, the timing and extent of the recovery will totally depend on renewed employment, as regular income alone will set the pace for household spending.

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The path to recovery consists primarily of these three things: the success of restrictions that slow the progress of the coronavirus; government action to economically sustain businesses and households; and renewed employment that will set a pace for household spending.

This podcast (6:57) argues that the lengthy and painful process imposed by today's economic crisis will have the effect of turning "investors" into real investors, who buy for the long term, knowing what they're buying and why, and what they're avoiding and why.

This article was written by

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GIL WEINREICH - Author of "The Mentor," a unique parable for financial advisors and those who aspire to become one. I have worked in the FA arena since 1997, and during that time, the New York State Society of CPAs twice awarded its prestigious Excellence in Financial Journalism award to me for a monthly column I wrote on business ethics. Previously, I reported on international news for Voice of America (where I was awarded a newsroom writing award) and prior to that worked as an editorial assistant at U.S. News and World Report. I live with my wife and children amidst the verdant and vibrant hills and dales of Jerusalem.
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