Clients and friends of FLI Investors gathered for a discussion on navigating the Fiscal Cliff in light of the uncertainty ahead and this year’s political election. Robert D. Rosenthal, FLI Chairman & CEO, and Jason Trennert, Chief Investment Strategist of Strategas Research Partners, shared their insights and predictions.

Jason Trennert(right) responds to client’s question about outlook for inflation, the U.S. dollar, gold and energy prices.

Robert D. Rosenthal(left) asks Jason Trennert if Europe and the Euro can stay together in light of the European debt crisis.

HERE ARE SOME OBSERVATIONS FROM THE HIGHLY CHARGED CONVERSATION TO KEEP IN MIND FOR YOUR INVESTMENT PORTFOLIO:

U.S. INTEREST RATES & DEBT
The U.S. Government is using short term debt to run the economy. This is an “extremely dangerous” way to capitalize the economy. US debt has gone from $10.9 trillion to $15.5 trillion in the past three and a half years. Yet, the dollar continues to be the reserve currency.

ASSET ALLOCATION
The only chance for positive real return is equities and the real return from bond funds for the next 5 to 10 years will be negative.

GOLD
Gold may continue to “have an underlying bid for a long time.” It’s not as much of a commodity play, as it is an insurance policy.

ENERGY
Oil production is limited by technology and it’s only a matter of time before a major transport fleet, such as FedEx, converts to natural gas.

THE EUROPEAN DEBT CRISIS
The fiscal authorities in Europe cannot continue to spend money they don’t have. The U.S. is extraordinarily different; it is the only place in the world where people want smaller government—“you will never see a Greek protestor calling for smaller government.”

Hope you will join us at our next event!

Jason Trennert
Managing Partner — Chief Investment Strategist

Jason Trennert is the Managing Partner and Chief Investment Strategist of the Strategas Research Partners. He has been ranked consistently by Institutional Investor magazine as one of the top Strategists on Wall Street. A keen market observer, known for giving “good copy,” he is a regular guest host on CNBC’s “Squawk Box” and “Bloomberg News.” He is the author of the popular investment book, New Markets, New Strategies, published in 2005 by McGraw Hill. Prior to founding Strategas, Mr. Trennert was the Chief Investment Strategist and a Senior Managing Director at International Strategy & Investment (ISI) Group. He has an M.B.A. from the Wharton School at the University of Pennsylvania and B.S. in International Economics from Georgetown University.