The Deficit and Your Portfolio

Do deficits matter? The question is too important to be left to economists and politicians. There's nothing more important to investors and workers than the size and direction of interest rates over the next 10 years.

Nothing has more power to turn an intelligent decision on what assets to own in a portfolio into a disaster. And nothing else makes putting together a portfolio right now so uncertain and so risky.

Unfortunately, the answer to the question is, "It depends." It depends on the size, duration and cause of the deficit. Looking at these three factors, I believe, will tell investors whether they should breathe a sigh of relief or head for the hills.

How Big Is the Deficit?

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