Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by James Nelson, financial planner at NelsonCorp Wealth Management. Welcome back, James.
James Nelson:
Thanks for having me, Brandy.
Brandy Auterson-Hurst:
So it feels like there’s a lot of uncertainty these days, both politically and economically. What are you seeing in the data?
James Nelson:
Yeah, no question, uncertainty is very elevated right now, that’s showing up in the data, and I brought a chart along to illustrate this. This is from the Inter-Nation Monetary Fund that tracks two important indexes, the World Policy Uncertainty Index and the World Sentiment Index. So the top one in red is the World Policy Uncertainty Index, and this index measures how often the words uncertain or uncertainty appear in reports tied to policy, politics, and any other government decisions across about 70 countries. As you can see, that has skyrocketed in recent years, and now at its highest level in history. Now, you might expect that kind of uncertainty to coincide with weak economic sentiment, but that’s where the bottom chart paints a different picture. And what we see here is this is the World Sentiment Index, which tracks whether economic commentary is more positive or negative, and as you can see, we’re in positive territory, and even trending higher in recent years. So basically, what this is showing is that just because there’s uncertainty, doesn’t mean that the markets or economic data goes to heck.
Brandy Auterson-Hurst:
Okay. So what does this mean for investors and viewers?
James Nelson:
Yeah. It’s a good reminder that headlines don’t drive investment decisions, or shouldn’t drive investment decisions. Uncertainty is definitely uncomfortable and there’s plenty of times that we do deal with uncertainty, but that doesn’t always translate into negative performance in the economy.
Brandy Auterson-Hurst:
All right, James, as always, thanks for joining us.
James Nelson:
Thank you, Brandy.
Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.