Investing in Uncertain Times (Carefully)

Under normal circumstances the recession of 2008-2009 would be completely over now. Unemployment would have returned to somewhere between five and six percent. People who lost their jobs before the bank and financial crisis would have either returned to similar jobs or embarked on new careers, and people would have started thousands of new businesses.

Why hasn’t this happened? One word: Uncertainty.

There are so many changes taking place in government right now, and so many potential changes being contemplated, that substantial numbers of people – individuals and employers – are unwilling to invest right now.

This presents an opportunity for the prudent and thoughtful investor.

Opportunities exist because investments that under normal conditions sell for far more than current, are underpriced. What will environmental regulations be? What will financial reform bring? What is happening with health care costs? These are all perfectly legitimate questions.


Whatever the future conditions are going to be, the best run companies are going to respond to them properly, and to a more successful degree than their peers. So while the future is not guaranteed by any stretch of the imagination, the proper response is not to blow off investing now.

The proper response is to determine which companies are best positioned to benefit regardless of changes and circumstances, AND which companies have the most effective management at dealing with issues, changes, and market conditions. These are analysis we are constantly (and successfully) performing for our investment clients.

Since the shares of many of these companies are undervalued, and since they frequently pay dividends in excess of current bank and bond rates, the smart thing to do is make investments now in HIGH QUALITY companies because: 1) They will thrive in the future environment(s), 2) their share prices are cheap now, and 3) because the cash flow from dividends exceeds what can be earned elsewhere.

This is a winning risk reduction strategy. This is also a way to increase your rate of return and likely reduce your taxes. What has your investment advisor done for you lately? Invited you to a wine tasting? Sent you an expensive gift? Or produced winning investments for you through a sound and effective strategy?

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