Financial Opinion and Insights

What’s Taking So Long?

Jim Lorenzen, CFP®

Jim Lorenzen, CFP®

Corporate profits have been rising for nearly two years now, and GDP has been growing, as well!  In fact, the majority of key indicators have been moving in the right direction, too; but home sales are still in the dumps and I still know a number of people – you probably do, too – that are still out of work and can’t find a job!

According to a memo written last week by Wayne Yamano of John Burns Real Estate, the basic day-to-day realities that keeps all of us `in the dumps’ are the ones that hit affect virtually every working American.

Job growth is dismal.  Even with all the `newly created jobs’ we keep hearing about, we still have 7 million fewer people employed today than at the peak of 2008!  And, while the official unemployement rate remains close to 9%, a whopping total of 15.9% are either underemployed or have given up the search entirely!

Inflation – do I really need to say it? – is here.  Despite the fact interest rates are low and no one’s collecting a lot of dollars the easy way, food and energy are going up at what seems like a break-neck pace!  According to AAA, gas prices are up 38% from a year ago, which is affecting all the food you buy in the grocery store.   Since food and energy aren’t included in the government’s computing of the CPI, it’s easy to see why there was no adjustment to Social Security or other benefits for 2011.

Home values are down.  I know, I checked mine at Zillow.com, and it’s down about 30% off its pre-meltdown peak, which was an admittedly inflated figure, anyway.  We’re not alone, it appears the national average is about 31%, largely the result of having 23% of all mortgages currently `under water’.

Consumer confidence, while trending up slightly, is at 65 which is about 60 points below its 44-year historical average, according to the Conference Board’s figures updated through April.

Bottom line:  It’s going to be slow, but we’ll get there.  We always do.  The world didn’t end last week and it won’t end next week either.    When it comes to investing, it’s all about having a long-term vision tied to a purpose and an allocation that factors-out short-term events.  After that, it’s just discipline.  Easy, huh?



"Lets Make A Plan"

"Let's Make A Plan"

Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER™ and in his 20th year of private practice as Founding Principal of The Independent Financial Group, a fee-only registered investment advisor with clients located in New York, Florida, and California.   IFG does not sell products, earn commissions, or accept any third-party compensation or incentives of any description.  Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader.  The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.  The Independent Financial Group does not sell financial products or securities and nothing contained herein is an offer or recommendation to purchase any security or the services of any person or organization.