Everyone is familiar with the traditional birthday party game musical chairs. Participants walk around a group of empty chairs, and one by one, a chair is removed—requiring players to jockey over the open chairs, which are always one fewer than the number of participants. The players know the music will stop, but they don’t know when, so they must keep moving until it happens.

That description is eerily analogous to the U.S. economy, where the quantitative easing of the Federal Reserve is much like the music. “Fed watching” has become almost a science as financial pundits hang on every word of every statement from Janet Yellen and other Federal Reserve governors, looking for a hint about the next rate increase or decrease.

If the economy was in a more natural state from an interest rate standpoint, business people and consumers alike could focus on their tasks—running a business, overseeing their household and planning for the future. Unfortunately, everyone knows the historically low interest rates cannot last forever. The interest rate environment has had a profound impact on the independent agency channel, driving private equity firms to seek returns in a variety of ways. In turn, this has led to an acceleration of independent agency acquisitions driving up the sales price to a point where the anticipated future organic growth rate cannot possibly justify purchase price.

The situation also has a ripple across the stock market as companies have used their balance sheets to buy back their stock, creating artificially high stock prices. Companies are also using debt to continue to pay dividends that their corporate earnings can’t justify. Currently, 10-Year U.S. Treasuries yield around 1.8%—considerably lower than the average dividend yield of the Dow Jones Industrial Average, which is currently 2.6%. This means if stock prices remain flat, investors will be rewarded with a higher current dividend return than the 10-Year Treasury note yield.

The net impact: Many investors are wary of putting a significant amount of their funds into stocks, realizing that at some point the Federal Reserve will raise the discount rate—and as a result, stock valuations will be based more on the fundamentals of the particular company, like earnings and future industry outlook. Those metrics are not as easy to manipulate with a more normal yield curve.

The 2008 recession may be eight years behind us, but the economy still seems unable to generate a GDP growth rate in excess of 2.0%. The Federal Reserve seems to be frozen in this state of low rates. This paralysis is global, and some countries have adopted “negative” interest rates to stimulate spending.

So what can independent agents do in this kind of environment? Continue to invest in your own business, with the objectives of leveraging technology, recruiting and retaining talented staff, and increasing your client capabilities.

Independent agents have three choices when it comes to investing: Invest in debt obligations like bonds or CDs, and receive a return that may not even keep up with inflation; Invest in a public company whose true value may be inflated due to corporate buybacks; or Invest in your own agency, a business you know and understand.

Yes, diversification is important, and agency principals should not put all their eggs in one basket. You can avoid that by reducing your ownership starting 10 years out from when you plan to retire. Many agency principals wait until they are almost ready to retire, which reduces their flexibility when it comes to the sale of the agency, leaving them subject to the whims of the economy. Long-range planning can reduce that risk—and the level of stress.

Dave Evans is a certified financial planner and an IA contributor.