I was at a garden party recently, on a beautiful Sunday afternoon in September, where talk centered around the economy, politics, favorite movies, and the latest in electronic gadgets. Yet one conversation that struck a particular chord with me was the “case for China.”
You’ve heard it repeated in various forms. The Chinese economy is booming, while the developed economies are in a funk. Chinese infrastructure is gleaming and new, while U.S. infrastructure is falling apart. Output from the Chinese economy will soon exceed U.S. output, signaling the end of American influence and prominence in the world. The argument is actually much broader and about emerging markets in general. The emerging economies are ascending, and the U.S. and other rich countries are washed up.
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When the stock market sells off, as it did in late July and early August, there is an inevitable surge in commentary on the riskiness of U.S. retirement accounts. The main worry is that retirement investors are taking on too much risk and that retirement assets should be invested in “safer” securities or programs.
From my perspective, many such criticisms seem unduly focused on the short run.
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Everyone who is not on vacation appears to be focused on the uncertainty created by the lack of a resolution to the most recent government funding crisis. I wish I could add some value with respect to the discussion of the “default” issue or, even better, predict what the final outcome will be. I can’t.
And of course my own views on the subject ultimately don’t matter much. In fact, they probably matter even less than the views of people we’re all watching on TV and reading in the press who are paid on the basis of how well they can attract and retain attention in the mainstream media.
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Every Wednesday night, my next-door neighbor and I tend to take out our garbage at about the same time. Don’t know how that happens, but we usually get to talking about the usual topics—our kids, sports, the weather. And every week, my neighbor asks me the same question: “How’s the economy doing, Joe?”
My candid response over the past several years has been the same: “It’s been better.”
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Here are several “big picture” retirement themes I expect to hear more of in the coming year. I’ll come back later in the month with a post on personal retirement tactics.
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