ARBOR WEALTH: Breaking Bad: From D.C. to Illinois to Athens

Published: Thursday, January 31, 2013 at 04:32 PM.

Europe in the last half of 2012 is another classic example. The EU was, and is, in serious financial trouble and European markets were slumping on continual bad news. Yet, European markets enjoyed a better than expected second half in 2012, even in the face of these horrible economic realities.

The troika of financial manipulation in the EU, the International Monetary Fund, European Central Bank and European Banking Authority stepped in, offered aid, and eased markets by promising to do whatever is necessary to sustain the economies of countries like Greece.

Things are actually no better in Greece. Unemployment is at 25 percent. Citizens are burning roadside signs for firewood to heat their homes. Long time business owners are shutting down and emigration is rampant. But the perception that Greece will be saved overrides the reality of its economic depression, and the backing of the EU financial troika has kept European markets afloat.

Problem is, eventually countries like Greece, and the U.S., must pay the piper, with current money, and not dollars borrowed from government workers’ pension plans. Ultimately, our government must sit at its own kitchen table, devise a budget like your family’s and mine, and live within its means. 

So while we are all enjoying this new market bullish trend, we are hedging our bets with our traditional defensive investing philosophy.  We concentrate on American companies with a broad global presence that produce staple goods and provide essential services. We want to own some protection on the downside when the day of reckoning arrives.

Margaret R. McDowell, a chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, a fee-only registered investment advisory firm located near Sandestin. Call 850-608-6121 or visit www.arborwealth.netfor more information.


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