Overall, most economic indicators show that the economy is gaining strength. A large contributing factor was the Federal Reserve bond buyback. In non-financial terms, the economy has been boosted by the medicine injected by the Federal Reserve.
In 2014, it appears the Federal Reserve will begin to wean us off the
stimulating medicine. As we open the book on 2014, the question becomes
whether or not the economy is strong enough to stand on its own two
Only time will tell, but there are other hurdles that stand in the way
of steady improvement. I believe our nation’s deficit spending is a
major concern. And who knows where the uncertainty over the new health
care law will lead?
Although the actions of the Federal Reserve and Congressional spending
are important in the big picture, my concern as a financial adviser is
the impact all these policies will have on my clients and readers.
I am neither a market forecaster nor an economist, but I have a feeling
2014 will be a somewhat choppy year. That could easily translate into
interest rates beginning to climb and a stock market seeking direction.
For your kitchen table planning, I believe you need to maintain
financial discipline regardless of the direction of interest rates or
the stock market. For example, you should continue contributing to your
retirement plans and use your credit cards judiciously. My suggestion
for 2014 is to keep it simple. Expect the unexpected and stay on target
regardless of the negative headlines. That means, among other things,
paying yourself first and holding the reins on credit card spending.
Reviewing the past year, I’m finding that far too many people over
thought it. Their instincts said the economy would collapse and
“experts” and commercials urged pouring money into gold and silver.
Don’t get me wrong, a reasonable percentage into precious metals is
fine, but too many people listened to too many commercials.
Unfortunately for those that bought large amounts of gold in 2013, the
gold market fell hard. Others, who listened to the doom and gloom on
television, sat on their cash and their hard-earned money barely grew.
Too many gold buyers and cash sitters missed out on all the fun in 2013.
Most of them would likely have fared better by sticking to their
I have always said that wealthy retirees didn’t necessarily choose
better investments than others. Rather, over the years they remained
disciplined and consistent with their investments in a myriad of market
They had a disciplined method and they stuck with it. They paid
themselves first during tough times, didn’t overspend during the good
times and didn’t panic when the television newscasters said it was time
to panic. In short, they did not change their investment strategies.
Looking at their success reminded me that simple and consistent money
habits can turn out just fine. Again, I suggest you keep it simple in
2014. Don’t let headlines and others derail you from your financial
goals and investment objectives.
Naturally, I will do my best to keep you informed and up to date, and I
wish my clients and readers all the best in 2014. I plan to be with you
throughout the year to help keep you educated and informed.