Lessons from the Shutdown and the Importance of Goal-driven Asset Allocation

John P. Calamos
John P. Calamos

By John P. Calamos* – The most recent U.S. debt ceiling debates and government shutdown have reminded us that uncertainty is unavoidable and often out of our control. There’s no reason to believe this will change. We have a debt ceiling deadline behind us, but there’s another right around the corner and the acrimony in Congress looks deeper than ever. We also have the
still unknown economic impact of the government shutdown and an unclear timeline for a tapering of the Fed’s bond-buying program—and the higher interest rates that will result.

We often speak with clients about how they should position their asset allocations to address these myriad uncertainties. Economic and political issues are all highly consequential, and there is no doubt that this recent shutdown had significant impact on many Americans. Successful wealth management strategies do take the economic landscape into account, both in the U.S. and globally. But having invested professionally for more than 40 years, I believe that what matters most for long-term asset allocation is much closer to home—your home, to be precise.

The wealth management strategies that are most likely to succeed are guided by an investor’s personal considerations.
This approach, which we could think of as “goal-driven asset allocation,” doesn’t focus on the short-term ups and downs in the economy, the debt ceiling debates or who wins the next election. Also, goal-driven asset allocations are attune to broad market trends and patterns, they are not necessarily about beating a market index each and every week. People have grandchildren to send to college, businesses to grow, long-term care needs, and dreams of world travel. Indexes don’t.

We often speak with clients about how they should position their asset allocations to address these myriad uncertainties. Economic and political issues are all highly consequential, and there is no doubt that this recent shutdown had significant impact on many Americans. Successful wealth management strategies do take the economic landscape into account, both in the U.S. and globally. But having invested professionally for more than 40 years, I believe that what matters most for long-term asset allocation is much closer to home—your home, to be precise.

The wealth management strategies that are most likely to succeed are guided by an investor’s personal considerations.
This approach, which we could think of as “goal-driven asset allocation,” doesn’t focus on the short-term ups and downs in the economy, the debt ceiling debates or who wins the next election. Also, goal-driven asset allocations are attune to broad market trends and patterns, they are not necessarily about beating a market index each and every week. People have grandchildren to send to college, businesses to grow, long-term care needs, and dreams of world travel. Indexes don’t.

*John P. Calamos, Sr., is the Chairman, CEO & Global Co-CIO of Calamos Asset Management, Inc. The son of Greek immigrants, John P. Calamos, Sr. is actively involved in a variety of philanthropic endeavors in the Hellenic American community. He serves as the Chairman of the Board of Directors of the National Hellenic Museum in Chicago. – See more at: https://usa.greekreporter.com/2013/06/02/john-calamos-lessons-from-greece/#sthash.rDX8ztcE.dpuf

*The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice. – See more at: https://usa.greekreporter.com/2013/08/01/calamos-recovery-trumps-taper-talk/#sthash.8vZBxai8.dpuf


LEAVE A REPLY

Please enter your comment!
Please enter your name here