U.S. Trust recently released its new 2013 market outlook, anticipating fiscal transparency will have an important impact in the coming months, a solution that has been dubbed "The Big Fix." It projected that as markets in the U.S. and overseas slowly recover from the fiscal crises over the past few years, fiscal transparency could help entrepreneurs obtain business financing and assist investors seeking to provide a company with additional funding.
"We believe the defining feature of financial markets in 2013 all around the globe will be a transition from this monetary policy-based 'great experiment' into a more business-directed and fiscally transparent period we’re calling 'The Big Fix,'" said Chris Hyzy, chief investment officer at U.S. Trust. "The Big Fix is based on a recovering housing market, continued strong corporate profits, increased transparency in fiscal policy and, towards the second half of 2013, a rise in capital expenditures by corporations."
The data from U.S. Trust also indicates the firm sees an improved financial future for the country. In late November, the company established a 2013 S&P target of 1600, giving it an edge over the 2012 target of 1350. However, this positive data could be dimmed by the fact that the company's Investment Strategy Overview suggests markets will not head steadily upward throughout the year.
Seeking investments as transparency increases
The company's Investment Strategy Overview revealed that it expects growth not from pro-growth fiscal policies, but rather from the increasing transparency. It anticipates this will jumpstart investors and lending institutions, which could mean those entrepreneurs looking for investment loans could see a benefit.
If financial transparency does increase as has been anticipated, companies may feel more confident to launch their dream businesses, expand their current companies or begin development of a new product. Such projects often require business loans, and obtaining one may be a little easier for those with strong growth plans and histories as transparency continues to grow.
However, larger lenders may still be hesitant to hand out business financing to smaller operations or those companies with an idea for a potentially risky product. In these instances, entrepreneurs may have better luck obtaining the loans they seek from smaller banks which can also ensure they have the proper cash management options as their business continues to grow.
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