Daily Bullets….For August 8, 2014

·         Bummed out boomers…..This article points out the current low confidence among many segments of U.S. society about the outlook for prosperity and growth. The pessimism is particularly acute now among baby boomers who, having lived through the greatest period of economic prosperity in the country’s history (1950-2000), now believe growth and economic opportunities will be more muted in the future.

What’s the point? To a certain degree, we think the boomer’s more dour outlook is justified. The post-WW2 era, in which the U.S. dominated the globe both militarily and economically, provided an era of unprecedented prosperity. Greater foreign competition and (ironically) significant technology advancements are now contributing to more muted job growth. Another key reason for boomer’s angst: many, if not most, boomers did not adequately save for retirement due to a “live for today” mentality. From a financial planning perspective, this was a huge mistake. Regular and disciplined savings is critical to achieving a successful retirement. Equally important is the manner in which those savings are invested. As financial planners, we recommend investing in a diversified portfolio that includes multiple asset classes, such as stocks, bonds, commodities, natural resources, and international equities. This approach provides the exposure for growth while providing lower volatility due to the asset diversification. Diversified portfolios provide better risk-adjusted returns over the long term, when compared to all equity portfolios, because of varying correlations among asset classes held in the portfolio. Link: http://finance.yahoo.com/news/grumpy-old-boomers-are-a-big-drag-on-america-s-economic-mood-161020535.html