Optimism in the Face of Uncertainty

My wife sometimes refers to me as annoyingly optimistic, but I like to think of it as realistic optimism. Have you ever heard the phrase, “why complain, no one is listening”? I recently read in an article that listening to complainers is bad for your brain…sounds a bit overblown to me, but, I can see the point.

Every day we seem to be bombarded with negative news: the Fiscal Cliff, a recession overseas, high unemployment, global terrorism, and the list goes on. As we approach the end of 2012, I want to focus on some of the positives in our world that do not receive the same attention.

As I am writing in late November, the S&P 500 is up approximately 12% for the year. It is up about 50 fold in the last 60 years and 10 fold in the last 30 years (the average length of a couple’s retirement).

Outside of the investment arena, there are a number of positive things happening in the United States and around the globe:

  • We are in a growing global economy. In 2004, GM sold ten cars in the U.S. for every one it sold in China; in 2010, they started selling more cars in China than in the U.S.
  • Technology is changing rapidly and becoming increasingly inexpensive, providing much opportunity to change the world. An article in The Economist discussed the future of 3D printing and how it could transform manufacturing all the way to the medical field. Can you imagine “printing” a medical implant that resembles a bone?
  • The U.S. has the opportunity to go from a net importer of foreign oil, to a world exporter of clean natural gas. It’s inexpensive and it is estimated that we have more 100 years’ worth in our own natural resources. This alone has the potential to dramatically reduce our deficit.

Based on traditional economic recovery measures, the U.S. is not yet hitting on all cylinders, but we seem to be moving in the right direction:

  • Unemployment, while still historically high has declined from its peak of 10% in October of 2009 to 7.9% in October of 2012i
  • The U.S. is still the largest manufacturing country in the worldii
  • U.S. household debt as a percentage of disposable personal income has decreased by more than 20% since 2007iii
  • U.S. corporations are maintaining cash balances as a percentage of assets near the highest levels they’ve been since 1977iv

I’m not saying you should see everything through rose-colored glasses, but I am suggesting you ignore some of the noise with which we are inundated daily and not let it affect your mood. Instead, focus on what you can control: a financial goal for 2013, better spending habits or giving back to charitable causes. There are many things we cannot control, but we can control our attitude and make a conscious decision to focus on the positive. As we move through the holiday season and head into a new year, we suggest you evaluate your successes over the past year, as well as goals for the new year. There is plenty of uncertainty in the world and there always has been. Consider embracing the philosophy that the only certainty in life is that there will always be uncertainty.


iSource: U.S. Bureau of Labor Statistics
iiSource: 2012 World Bank, as of 2011, based on dollar value of manufactured goods
iiiSource: Federal Reserve, based on ratio of debt payments to disposable personal income
ivSource: Ned Davis Research Group. Based on historical data since 1977.  The historical average cash level for 3.31.77-6.30.12 was 9.63%; as of 6.30.12 it was 13.57%

If you are not currently a client but would like to learn more about Truepoint’s services, please contact Lisa Reynolds. If you are a client and would like to learn more about this Viewpoint topic, please contact your lead advisor.

Truepoint Wealth Counsel is a fee-only Registered Investment Adviser. Registration as an adviser does not connote a specific level of skill or training. More detail, including forms ADV Part 2A & 2B filed with the SEC, can be found at TruepointWealth.com. Neither the information, nor any opinion expressed, is to be construed as personalized investment, tax or legal advice. The accuracy and completeness of information presented from third-party sources cannot be guaranteed.

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