The Elephant in the Room, No one seems to see.
The majority has been reached. There are now more women, younger generation & minorities than “the quickly getting elderly, white, purchasing power rich male and it will only get heavier on the one side. (NOTE: I’m not AGAINST the elderly white male, but with this said, this is not the side getting heavier, NO PUN INTENDED FOR SURE)
The issue is we are all a product of our own environment and the economic and investing environment this majority of “new” investors are leaning is safety and the unfortunate distrust of giant corporations, Wall Street, government, Preaching not Teaching spirituality, It’ll all be o.k. my way or chicken little’s “The Sky is Falling” if it’s not my way, it’s the highway mentality.
What does this mean? Nothing. In the short-term 1-3 years it will not mean much, over the long haul, 7, 10, 20, 30 years (2050) is what most economist are calling it, but it will be more like 20/20, when another younger generation, this is HUGE, because each generation is different, conservative voters must at the least hope they can influence this group of elementary and Jr. High children to see life differently than I (I see life as quality) What it means, now more than ever, is pluralism or acceptance of others with a different, but not lesser, of a product of their own environment.
If navigated correctly, this could be a BEAUTIFUL ERA. The economic environment will stabilize and individuals will be much more diversified and the advice business will be more same-sided (fee-based vs. transactional) & decisions will be made from of a gathering of information about priority, organization and Simplification rather than FEAR & GREED. Less emotion, more certainty…Less debt, more acceptance and a better world – Quality of Life is the Goal. If not, we will see a massive pull out of investment markets and into cash, devaluing the almighty dollar and a core rebuilding of the economic system will take place…U-G-L-Y – all of this is because of trust, or lack there-of and a consistent tendency to take care of yourself and don’t depend on the government or markets for anything…Ask any professional under the age of 45 the allocation of their Assets and Liabilities and compare it to a 72-year-old. What you will see is a textbook gone wrong, why is the 72-year-old widow invested riskier than me, a 38-year-old male? Because I am more informed and my environment is different, as are my priorities. I like to have conversations with my professionals, not presentations telling me what to do, but leadership in expert fields Listening to me and Helping me make the best decisions for me and my family.
It’s a group (younger generations, minorities & women) of creative, smart, decision makers that will take the information they can get (A lot, compared to 1950, thanks Internet) compared to the historical decision makers. If it is NOT navigated with fineness we will see a massive pull out from in-efficient markets around the world and charts looking like the peaks and mountains of Tibet, not the, why are we getting used to, Rocky Mountain graphs. An efficient market frontier is a graph going from bottom left to upper right corner looking like an “S” turned a bit diagonal.
What we hope to create, as advisors, is an economic landscape of more informed investors making decisions based on priorities, life goals, investment objectives, Tolerance for Risk and Time Horizon. Allocating and Diversifying assets and liabilities in a prudent manner, best for themselves and what is most important to them.