Pitcairn and Glenmede, a Philadelphia-based wealth- and asset-management firm, are telling clients to brace themselves for a 10- or 15-year period of recovery. "You certainly have the potential for rolling-debt scenarios," says Glenmede's investment strategist, Jason Pride.
At this stage in a cyclical-recession's recovery, you'd expect gross domestic product growth of between 7.5% over the previous few quarters, says Pride. The growth we've seen in recent quarters comes to about half that.
And things could get dicier when the U.S. and other governments, having spent heavily to stimulate their national economies, try to come to terms with skewed balance sheets. Their choices come down to raising taxes or cutting spending, measures that are harmful to domestic-product growth, politically delicate and difficult to time correctly.
Boxwood Strategic Advisors LLC, a New York-based wealth-management firm that focuses on wealthy families' balance sheets, sees families that view the long climb back as an opportunity for them to become better wealth stewards.
"The people we see know that they face challenges," says Boxwood's managing partner Alexander Haverstick. "But they're very interested in coming to grips with their assets and liabilities."
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