All the talk about the economy and the politics surrounding it all seems never-ending, sometimes overwhelming, and finally at times nauseating. Not only does it seem complicated, but sometimes downright confusing. Like all the talk around interest rates being at all-time lows and how that’s good for home-buyers, yet bad for our bank accounts and the interest we receive. This seems straightforward enough, but what about how rising interest rates push bond prices down and yields up? What's up with that?, Or why does a "weak dollar" seem to mean good things for business and our economy? Don't we want a strong dollars? I wish my dollars acted a little stronger every month - how about you?
Then there's taxes with an entire alphabet of confusing terms and acronyms. We've got your AMT, Basis, Credit, Deduction, Exemption, FICA, Gain, HSA, IRA, Joint, K-1, blah, blah, blah. Thank goodness the recent law that they passed for taxes keeps some of the rules the same, lowered some taxes on others further, and raised taxes on some new things. That makes what to do clear enough!
Then there's economists talking about new normal, contrarian and contagion. These sound more like medical problems rather than the economy, but even the older terms like leading indicators and lagging -- which they say unemployment is a lagging one, but how does that help? What do I do with this information when it changes?
In the end, this world of finance and economics is not for the faint of heart or the bottom liners. You need to learn the lingo and plan to stay a while if you want to dine with the players. Yet who cares? For the rest of us who just want to know what to do with our money, I offer some simple straight forward advice: don't listen to any of it, and keep going forward. What you are currently doing is likely just fine. Most of what is reported in the media gets sensationalized just to sell the news. It normally doesn't warrant changing your strategy for saving or investing, so don't listen and just go forward. The lack of procrastination or paralysis may result in a good outcome in spite of a bad understanding.
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Minneapolis, MN 55426
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Securities offered through Royal Alliance Associates Inc., member FINRA/SIPC. Investment advisory services offered through Focus Financial Network, Inc., a registered investment advisor not affiliated with Royal Alliance Associates, Inc. / 1000 Shelard Parkway, Suite 300, Minneapolis, MN 55426