Many commentators are concerned by signs that we are heading into a low-growth phase within the global economy. A consensus seems to be forming that global economic growth will be in a range of 3-5% for an indefinite time.
If you are a pension plan that needs to make 8% to support your fiduciary responsibilities to the plan sponsor and your plan participants, and you are investing only in growth, this can be a cause for concern. But if you invest, instead, in wealth creation, you should be able to make your 8%, and then some. There is no shortage of profits in the economy, even if there is a slowing in the rate at which profits are growing.
Low growth does not mean low wealth. It does not have to mean low returns, either. As long as we can avoid getting jerked around by booms-and-busts, if you invest in wealth, and not just growth, you should do just fine.