Why a Bet on America Could Pay Off Big

Pessimism Doesn’t Reflect Reality Right Now

Pessimistic investors are urging people to “Sell America.” But there are many reasons why high-net-worth individuals should consider laying a bet on America instead. Some may want to ‘Buy America’ for patriotic reasons, but it’s also just plain business sense. 

The market remains uncertain today. But it’s worth looking at the long-term outlook too. Through the centuries, we’ve seen that the economy is often extremely resilient to political upheaval. Moreover, even when bear markets do materialize, the economy has always recovered and gone on to reach new highs. 

Past performance is never a guarantee of future results. But for individuals with wealth to invest and an interest in playing the long game, that should be a promising sign.

Strong Institutions Buttress a Bet on America

Historically, when U.S. financial systems have come under stress, it has often led to a doubling down on values and increased efficacy afterwards. 

After the Global Financial Crisis of 2008, for example, or the Enron scandal, cultures changed and systems strengthened. That meant increased protection of property rights for those invested in real estate, coupled with stability for the long term. Corporate governance regulation, meanwhile, arose to reduce the risk of fraud or malpractice affecting your investments. 

With long-standing institutions like the Federal Reserve now facing acute political pressure, keep in mind this historical trend of long-term strength.

A Culture of Investment and Entrepreneurs

The culture of the U.S. is not built on meekly accepting a back seat. U.S. exceptionalism remains as strong as ever on a cultural footing — and makes a marked impact on the economy as well. 

Private investment has for years been the bedrock of the country’s development. It powered the railways and telephone exchanges of the past as well as networks of highways and the internet today. For qualified, wealthy investors, there could be increasing opportunities in private equity, with potential rewards for investors willing to bet on America.

Americans appear almost uniquely comfortable with risk, reflected both in a culture of startups and entrepreneurship and a willingness to invest in ideas. This culture of innovation has driven huge progress and wild success stories, and may well continue to do so. Silicon Valley is at the forefront of global technological progress, with many tech firms experiencing significant growth currently, powered by the rise of AI. 

As you consider how to protect and grow your wealth, particularly for future generations, the current climate of uncertainty can certainly be unsettling. However, even compared to other wealthy and developed countries, America is in rude health. Since the turn of the century, its growth figures resemble an emergent economy, as it outpaces similarly sized markets. 

Even Mississippi, the poorest state in the U.S., is richer than many nations. Some indicators may suggest the U.S. is slowing down, but it still remains streets ahead of other countries. And, of course, the S&P 500 continues to deliver solid returns and flirt with record highs. Many economists would consider that alone to be a good basis for a bet on America.

None of this is to say that you shouldn’t look for opportunities overseas. However, it may be worth viewing negative takes on America’s long-term outlook with a critical eye, given past trends and future indicators. 
Financial advisors can help you ensure your portfolio is suitably diversified geographically and well-positioned to handle any economic or political turbulence. To learn more about how Griffin Asset Management could help, talk to one of our advisors today.

Sources:

J.P. Morgan: Don’t sell America—bet on it

Investopedia: Enron Scandal and Accounting Fraud: What Happened?

The Motley Fool: If You Invested $10,000 in Tesla for Its IPO in 2010, Here’s How Much You’d Have Now