It’s become a trite understatement to say that the world has changed in the last year. We’ve all lived through it, and we’ve all been affected by it one way or another. If there is any silver lining from the world’s struggle with the pandemic is that there are many lessons to be learned. From a financial perspective, COVID-19 has taught us the importance of financial planning in Palm Beach. Just because we can’t see the unexpected, it doesn’t mean we can’t prepare to overcome stormy seas in the future.
Our household finances are often tied to global economic trends, and we often don’t realize it unless we are invested in the market. Here’s what you need to know about how international financial entities are gearing up for recovery.
In 2020, the World Economic Forum (WEF) released its annual Global Competitiveness Report. The report was more or less what we’ve come to expect, with one major exception – in light of the global pandemic, it put its long-standing Global Competitiveness Index rankings on hold. This was done with the intent to focus on recovery and economic revival instead of competition.[1]
It’s not just the pandemic that has made competition less of a focus – over the last two decades, economies have become more interconnected, and markets depend on each other to generate revenue. An integrated world means that supply chain and production capabilities are tied to each other, unlike ever before, making geopolitical support and shared innovation the key to mutual growth.[2]
As we move past the pandemic, the WEF continues to push for further collaboration to avoid the same negative impacts that left world economies reeling in 2020. The same report we referenced emphasized four main areas in which we can improve: the environment, human capital, financial markets, and the innovation ecosystem.[3]
These four areas could apply to our own households as well. After all, this pandemic showed just how much humanity leans on each other to overcome challenges — neighbors shopping for neighbors, checking in on each other, making the extra effort to stay in touch with high-risk individuals to keep their spirits up. And while the country struggled to get through the pandemic, we also had to contend with the highest number of named storms on record, record levels of wildfires, and the hottest day on record (129.9 F in Death Valley, California).[4]
As the world adapts to new trends, it appears that the U.S. will be changing its diplomatic approach to certain nations. The Biden presidency is expected to enhance its relationship with European countries and approach the China trade war with a less adversarial hand and for the sake of mutually beneficial changes. Furthermore, as we approach something that resembles economic normalcy in the new year, we could see a weaker U.S. dollar which favors emerging markets in the short term and gives the economy a needed boost while people get back to the labor force.[5]
One of the most significant economic events to end 2020 was Great Britain working out its long-awaited deal with Europe to move forward with the financial separation known as Brexit. The new agreement promises new regulations, trade disputes, and other nations’ challenges, but it does not include any new tariffs or quotas.[6] The split, which goes into effect on February 1, 2021, could present new difficulties for residents of the two regions in terms of cross-border travel, schooling, business dealings, and job opportunities.[7]
Some fared better than others through this time, but many people’s household finances have been transformed, leaving some with less income and others with more savings. As the economy recovers and blooms, it would serve us to remember the lessons of the pandemic and improve our financial planning in Palm Beach.
Staying on course for your retirement in the context of global uncertainty means analyzing your finances and creating a plan that is safe and predictable. This means looking for investment options that are time-tested to withstand market shake-ups while maintaining long-term growth. These can look like mutual funds or perhaps annuities.
You may have your future mapped out, but is your family as dedicated to financial planning in Palm Beach? There are many options for ensuring your family’s financial stability, including creating a special trust devoted to their needs. Some trust options include:
Trust options are varied and customizable to fit the specific needs of your family.
The key to staying profitable throughout a crisis is having a dedicated wealth manager on your side who can help you adjust to changing trends. There is more to investing than just buying stocks and forgetting about them. Effective financial planning in Palm Beach requires a hands-on approach and tactical strategies that change when the times demand.
This seems simple, but the truth is that if you are busy, it can become rather challenging to stay on top of all the changing trends in the global market. It’s not just the information either; if you do not have the lexicon and functional knowledge of finances of a professional, it can be impossible to interpret the data and know when to react.
That is the advantage of a financial advisor. We do all the hard work, so you don’t have to. Our team provides you with updates, white papers, and insightful examinations of market movements, as well as advice on how to change your strategy. Ultimately, we keep a forward-looking approach because our goal is to maximize your long-term financial growth rather than always be reactive to shifts that might not require an adjustment. We can tell the difference and help steer your finances to remain on course toward profitability.
It’s never too early to start planning for the future. With changing global trends and the uncertainty of unforeseen phenomena, the best tool in your arsenal to avoid financial hardship is our expert team at Legacy Financial Partners. Get in touch today to learn how we can help you prepare.
Content prepared by Kara Stefan Communications. Edited and Optimized by Digital Resource.
1 Klaus Schwab and Saadia Zahidi. World Economic Forum. 2020. “How Countries are Performing on the Road to Recovery.” http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2020.pdf. Accessed Dec. 29, 2020.
2 Ibid.
3 Saadia Zahidi. World Economic Forum. Dec. 16, 2020. “This is how countries can rebuild competitive economies for people and planet.” https://www.weforum.org/agenda/2020/12/how-countries-can-rebuild-competitive-economies-for-people-and-planet/. Accessed Dec. 29, 2020.
4 EcoWatch. Dec. 23, 2020. “The Top 10 Extreme Weather and Climate Events of 2020.” https://www.ecowatch.com/extreme-weather-climate-2020-2649628910.html?rebelltitem=1#rebelltitem1. Accessed Dec. 29, 2020.
5 Robert Horrocks. AdvisorPerspectives. Dec. 14, 2020. “CIO Outlook: Tailwinds for Emerging Markets.” https://www.advisorperspectives.com/commentaries/2020/12/14/cio-outlook-tailwinds-for-emerging-markets. Accessed Dec. 29, 2020.
6 Bloomberg. Dec. 24, 2020. “In Bullet Points: The Key Terms of the Brexit Deal Analyzed.” https://www.bloomberg.com/news/articles/2020-12-24/in-bullet-points-the-key-terms-of-the-brexit-deal. Accessed Dec. 29, 2020.
7 Joe Mayes. Bloomberg | Quint. Dec. 28, 2020. “Not So Fast! What Brexit Means for Border Crossers.” https://www.bloombergquint.com/quicktakes/not-so-fast-what-brexit-means-for-border-crossers-quicktake. Accessed Dec. 29, 2020.
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