Forum highlights financial trends from personal to global

Photo/Susan Walsh/AP

State and national bankers believe 2014 could be a strong year for the economy.

Alaskans heard an update on what the year could bring and how to navigate future investments at a Wells Fargo forum Feb. 27 in Anchorage.

Wells Fargo Alaska Regional President Joe Everhart said he is “cautiously bullish” in his forecast for the coming year, and Alaska’s economy will build on key changes from 2013.

On the whole, the state’s economy didn’t experience the same downturn as other regions of the country, although there was some consumer pessimism. Everhart said an economic forecast from the Anchorage Economic Development Corp. painted a fairly positive picture as well, with about 55 percent of households reporting good or great financial health and 66 percent reporting a high standard of living.

Oil and gas projects and regulations will be major drivers for 2014, Everhart said.

The oil tax reform voted into place by the Alaska Legislature last spring is a factor, and work toward a gas pipeline will also play into what happens in the state. Everhart said that a gasline will take more infrastructure development, and an export license.

Beyond Alaska, the Wells Fargo bankers talked about the national economy, and how investing is changing.

Mike Serio, regional chief investment officer, markets and product strategy, said technology will be a major driver in the national economy in the years to come.

For 2013, Serio said that certain markets, like the U.S. and Japan equities, did well — while others, like bonds, were flat or down.

Technology, he said, has room to drive the market.

He pointed to wearable technology as a major focus, and said that 3-D printing, particularly as it enters the health care field, will also become more prominent in coming years.

Serio also talked about the role technology is playing in oil and gas development, and the importance of unconventional drilling as a game changer.

“Going forward, our comparative advantage is going to be cheap and plentiful oil, gas and energy,” Serio said, of America’s role in the global economy.

Serio also said that population growth will likely come from immigration, making that a key policy point that will drive economic decisions.

Because of the dynamics of the American workforce, future GDP growth will likely come from technological advances, rather than working more hours or changes to the population, Serio said.

The forum also focused on more specifics about investing and market choices.

Wells Fargo Senior Vice President Jim Hodapp addressed bond markets and said in the short-term, interest rates remain low, as they have since 2008. That means that they’ll inevitably rise fairly significantly in the future, he said, although not immediately. He noted that 17 of 17 federal policymakers have indicated that overnight borrowing rates will be higher in five years than they are now.

Beyond rates, Hodapp said that the economy also influences the bond market. Auto sales are up, and other performance metrics are also improving.

“We think the economy continues to do better,” Hodapp said.

Those changes, he said, also mean that it’s wise to lock in loans or floating rates before interest rates increase.

Both Serio and Hodapp talked about the need to diversify as investors look at their portfolios, and Hodapp highlighted investments outside of U.S. markets.

“We are very important, but we are not the whole game,” he said. “Diversification is key.”

Everhart discussed the need for succession plan in businesses, and how individuals and companies can prepare for workforce changes.

In Alaska, Everhart said there’s been a lot of consolidation in the business world as older owners retire and other entities such as Alaska Native corporations purchase their businesses. Transition plans can help owners determine their future before they’re ready to get out, he said.

Carla Wigen, Alaska Market Leader for The Private Bank at Wells Fargo, said investing was once easier and the bank event was held to help individuals consider the new global economy, and how to invest in it, and start talking about their finances.

“People would rather talk about politics, sex, shopping, family, all of these things rather than finances,” she said.

On a smaller scale, Wigen also shared the financial vital sign checklist anyone should be reviewing regularly: goals and objectives for their financial portfolio, the status of their balance sheet, the risks of not meeting goals and objectives, and a basic plan for their estate.

11/15/2016 - 5:44pm