Written By: Daniel Carnes
Jaime Dimon is a name you will only hear over the major news outlets. And for good reason. He is currently the CEO of the largest bank in the world, JP Morgan. Since he’s in a prominent position in the world, it only makes sense that the news would take his words and run with it. Most recently, Mr. Dimon said that you all should “brace yourself” and that we are in for an economic “hurricane.”
Am I surprised? No, not at all. Why? Well, if I were CEO of the largest bank with the goal of increasing my bank’s bottom line, I would say the same thing. If I make comments about our economy knowing that it would spread like wild fire, it will inject fear into all who subject themselves to listen. The best outcome for me is to create so much fear in the markets that you sell your investments (at the worst possible time) and take your money to my bank. With your new generous deposits, I take that cash and lend it out (at higher interest rates) to make a profit. I can also buy corporate or government bonds (with higher interest rates), using your money to earn extra income from the dividends (net interest income). I will pay you next to nothing (maybe a few pennies) on your deposits because, bank interest rates are low. Oh, I almost forgot; you are still losing to inflation and missing out on a major buying opportunity in the stock market. But hey, your money is “safe”!
I hate to break it to you, Jaime Dimon is not acting in your best interest. He is acting in the best interest of the JP Morgan shareholders and himself. That’s why having a fiduciary financial advisor in your corner is important. A fiduciary will give you advice that’s only based on what’s best for you, not corporate shareholders, and not based on their own profits. At ElderAdo, we take our responsibility as a fiduciary very seriously because we truly care about our clients’ success.