Caliber Investment Group

A Higher Standard for Serious Investors

Philosophy




"Learn from yesterday, live for today, hope for tomorrow.
        The important thing is not to stop questioning"

                                                                          Albert Einstein

 
Economy

There is no doubt the last 10 years have been very challenging for investors. We have experienced increased volatility in the financial markets and a difficult economic downturn affecting individuals and businesses twice within a decade. Many economists agree that the financial crisis that began in 2007 has been the worst since the Great Depression of the 1930s. In review, the S&P 500 averaged an annual return of negative .95 percent from 2000 to the end of 2009. The value of the US Dollar has declined an average annual rate of negative 3.2 percent. The price of gold, however, has grown annually at a rate of 14.1 percent in the same period.
 
We base our outlook for the next 10 years on past and current trends. Economic fundamentals and forces that have driven our economy in the last decade have changed. They have become worse.  Continued decay of the U.S. manufacturing base, lower consumer savings, high unemployment, increased government deficits, and higher debt levels seems to be the new norm with no evidence of improvement. Take for instance the U.S. national debt reached 5.7 trillion dollars in the beginning of 2000. It increased to 12.3 trillion dollars by the end of 2009, a 115% increase in ten years. Most alarming is the U.S. unfunded liabilities that consist of Social Security and Medicare future payments, currently more than 100 trillion dollars. These levels are simply unsustainable. Current GDP to Debt ratio, now at 86%, is projected to grow further. History has hinted that once a nation's overall government debt exceeds 90% of its economic output, future growth deteriorates substantially, leading to severe economic decline. In addition, we also face a peak oil and limited natural resource dilemma that most likely will further impede future economic growth. It is important to understand that these problems are not unique to the U.S. but also involve other nations around the world. It is a global phenomenon that is unraveling and threatening economic prosperity.

Click here to view U.S. Debt Clock Real Time

Our position going forward is with caution and concern. Our philosophy is never to mislead our clients by promoting optimism in difficult economic environments for the sake of making you feel better, and creating a false impression that somehow, these issues will simply go away without consequence. Our mission is to provide our clients insight by reviewing possible scenarios that potentially may affect the economy in the near future based on these current economic trends. We do this through in depth historical research and analysis, and providing awareness to our clients through education.   
    
Investing

Given our cautious outlook on the economy going forward, we believe in order to effectively achieve your investment goals, today's investor need to change their way of thinking about how the economy really works. Investors need to make a conscious effort to understand how these dangerous economic trends will impact their investments and life savings. Our belief is that traditional methods of investing will not be nearly as effective as in the past. Investment portfolios and cash will need to be better diversified with non-traditional asset classes and there will need to be an emphasis on wealth preservation and careful growth management. We believe we can help by introducing hedging concepts, true diversification methods, and alternative strategies. Our goal is to protect your wealth and grow your investments. We offer you the best possible solutions in these difficult economic times through effective, proactive investment management and advisory solutions.