Careful Risk Taking to Boost Economy

Careful Risk Taking to Boost EconomySince the recession of 2008, consumers and businesses alike are more conservative than ever with their investments. The threat of losing money has caused many to be extra cautious with their finances. According to Federal Chairman Ben Bernanke and Vice Chairwoman of the Federal Reserve, Janet Yellen, risk taking is healthy and can boost economy.

In order to increase growth and employment, Chairman Bernanke believes the stimulative policies such as low interest rates will help with wise risk-tasking. The interest rate has been near zero since 2008. The central bank has been promoting quantitative easing – a system of buying Treasuries and mortgage-backed securities. It is all done to encourage banks to spend and lend and keep away from low-yielding Treasure bonds in lieu of higher-yielding such as stocks. With these policies, thoughts are that we are not far away from the record highs of the Dow and S&P 500 of October 2007. Though the Fed’s are buying Treasuries and such, the worry is that they will not be able to sell it off quick enough when the time comes.

Yes, risk-taking can go too far, but getting the economy strong again is worth it. Like setting rates low until the job market improves. That is looking like it won’t be any where lower than 7% until 2015, according to projections.

Understanding business policies and how to invest properly is important to you success. If you have questions or concerns with your investments and business, contact an Illinois business attorney who can guide you.

 

 

Image courtesy of freedigitalphotos.net