I know that winter is not actually coming to Myanmar, literally speaking. Not now or ever. However, the recent premier of that bloody soap opera for men that, I waited so long for, reminds me of the need to be forward thinking even in an age where winter is not the life threatening yearly event it used to be. It also reminds me that the great oversized returns the market has recently delivered will not go on forever, as this cycle will eventually come full circle.
In colder climates than Southeast Asia, people used to have to spend most of the nice months of the year working very hard to try and prepare for the brutal winters that came every year relentlessly. One never knew what kind of winter was coming, so every year they had to get ready for the worst and hope for the best. Being ill prepared meant death, so this way of life definitely fostered a forward looking way of thinking.
Nowadays however, the only winter most of us have to deal with is the winter of our lives. This modern winter is a time when our financial demands outpace our ability to earn. Finding a balance in life during our working “summer” between preparing for a future that isn’t even guaranteed to come, and enjoying our lives in the here and now is a difficult thing. Many say there is only one here and now so live for today, and there is a lot of truth in it. Yet the future can be a long and tiring slog if you aren’t prepared for it financially.
When I look at the state of the world and the amount of financial life support the printing presses of the central bankers have given the financial markets, one thing becomes very clear to me. Winter is coming. It is not a question of if, but when. All Yellen has to do is open her mouth and if market participants view her comments as dovish, markets go up. If they view them as an indication interest rates could rise sooner rather than later, the markets go down. Since we know how this will eventually have to go (interest rates cannot remain low forever), many of those out there making the quick gains while this market pushes on to new highs on a less than stable world economy and political scene are certainly living for the day. We don’t know what kind of winter the next crisis will be, but one thing that is historically certain is that it will come.
So yes, winter is coming. Your earning potential will eventually wither and die and you need to be spending some of your earnings saving for what could be a very long winter with all of the advancements we are likely to continue to make in the field of increasing human longevity. Winter is also coming on this six-year-old bull market, but it is going to be the central bankers who determine when it is time to set the clocks back.
David Mayes MBA provides wealth management services to expatriates throughout Southeast Asia, focusing on UK Pension Transfers. He can be reached at david.m@faramond.com. Faramond UK is regulated by the FCA and provides advice on pensions and taxation.
