Advisor Intelligence

Economist: Never Been a Better Time to Invest

There has never been a better time in the history of our world to be invested, said Tyler Cowen, the Harris professor of economics at George Mason University. Yet, the news coming out of the U.S. feels so depressing, he said during a keynote address at the Financial Planning Association’s annual Experience conference on Sunday.

One reason the news seems so bad is that the U.S. has had a 10-year period of weak income gains, Cowen said to FPA members. We are all poorer than we were a decade ago.

In addition, our country has too much debt due to “bad financial planning,” he added. We were borrowing and spending as if it were the 1960s. Since the 1970s, the country’s labor income has declined and now represents 58 percent of the economy, a sign of inequality. Meanwhile, the income going to capital has steadily risen.  So a lot of the gains of economic growth are not being captured by American workers.

But in general, Cowen is bullish on the U.S. and on North America at large. Aggregate demand has been growing steadily. The risk premium has also gone up, as investors have perceived investments as too risky and people are sitting in cash and CDs. But there’s still room for the risk premium to fall, he said.

Cowen said we will reach the age of cheap energy by 2030, becoming the leading oil exporter in the world. Information technology is creating efficiencies, as smart machines talk to each other. And he doesn’t expect an interest rate bubble in the future.

The North American economic unit is still the strongest economy in the world, in particular for its strong ties to Latin America, he said. Read the newspaper a bit less, and read history a bit more to put things in perspective, he recommended. 

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Diana Britton

Diana Britton is the Managing Editor of WealthManagement.com and REP. Magazine, covering asset management and independent broker/dealers from all angles. A native of Los Angeles, she now lives in...

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Megan Leonhardt is the associate editor at WealthManagement.com, covering all of the wirehouse news, as well as regulatory affairs. A business journalist with a background in the legal industry,...
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