Competing Interests...

The current economic environment and its effects over the last few years has made the competing interests of various groups more pronounced during these times. This is why I wanted to write a post about competing interests. Recently, I was reading about the self interests of people as it relates to the low interest rates, which have been rock bottom for a long time now. I was surprised when I learned that savers and risk adverse people (think older adults nearing retirement) are not too excited about the prolonged low interest rates which are not earning them much money on their safe assets in their savings and retirement accounts. Even though the general thought is low interest rates are helpful in stabilizing and spurring growth in the economy, some competing interests say enough is enough. They are saying this because they would prefer to go back to living off higher interest rates. As I begin my data dump of thoughts for the month of April, I find myself torn like many of the elderly who likely want the economy to do well but want their interest income to jump back to life.
The competing interests (or information) I have been tuned into are the mixed economic data that has been coming in. I have been dialing into economic data more and more and assume that is the same thing the Federal Reserve is attempting to do as they make key decisions about things like interest rates. My personal view is the numbers that I am seeing are like a bipolar diagnosis from the doctor. Recently you can see that domestically jobs numbers are improving, companies are on acquisitions sprees, and Quantitative easing has likely lead to markets moving higher. On the other side, the competing data highlights that domestic housing is double dipping and consumers are pinched as oil and food continue to skyrocket up in costs, and international countries (think China, Europe, etc) are raising interest rates or asking for bailouts (see Portugal).

Conclusion: Right now, I can't believe that my initial thoughts are to stay the course with no major changes to the portfolio that I've recommended in the past. I am currently favoring stocks and dividend paying companies are a primary focus. I would definitely say that some of the assets that you own should be "non-dollar denominated" assets like Ray Dalio mentioned and commodities (think oil, gold, silver, etc) are a solid bet. This gives me exposure to assets (stocks & commodities) benefiting from a slightly growing economy & QE and assets (think commodities) that may benefit from the fear trade or inflation down the road.

Roger that!