Today’s economy has been sending signals that it is in its final innings. The stock market goes up and down in price trying to discern the direction of the game – now surging forward with a tax cut or solid economic data, now pulling back due to the prolonged trade war or slowing corporate earnings.
Winter is often used in literature as a metaphor for difficult times and right now feels like just one of those times. The recent declines in stock prices are unsettling and lead to worry about the future.
We all know that risks exist, but our feeling about a particular risk is driven by our recent experience. Even knowing that we are likely to have another big earthquake, knowing that the risk exists, people don’t actually prepare because they have no recent experience of it. Many investors have fallen into a false sense of diminished investment risk because of prolonged calm in the markets.
Trade tensions have proven quite real over the last three months and continue to dominate headlines. Market price volatility continues apace as well, affected by concerns not only about trade but also rising interest rates and energy prices.
When is the right time for a parent to begin the conversation about their finances with their children? Or for a child to start this conversation with their parent?