Five Investment Strategies for 2012 from WealthTrust-Arizona

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Financial wealth management experts at WealthTrust-Arizona give advice on how to position your portfolio for the financial uncertainties of 2012.

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Have faith in equities, control your emotions and be alert for opportunities to plan against changes in tax law which may be coming in 2013.

The dawning of a New Year always brings uncertainty. After all, no one can predict the future with 100% accuracy and, if the past couple of years have taught us anything, in 2012 world events and the financial markets will almost certainly combine to create scenarios and outcomes no one could possibly imagine right now.

The financial experts at WealthTrust-Arizona have developed five suggested recommendations for dealing with your investments in 2012. “Simply put, two recommendations emerge,” according to Don Bertrand, Vice President and Senior Financial Advisor at WealthTrust-Arizona. “Have faith in equities, control your emotions and be alert for opportunities to plan against changes in tax law which may be coming in 2013.”

In the end, one overriding message comes through: invest for the long term. “While you should always pay attention to the global political and economic situation, you should also be resolute in your investment convictions,” according to Bertrand. “Do not let your emotions dictate your investing behavior. Historically, investors who change their investment strategy based on sudden moves in market behavior do much worse than those who make a choice and stick with it.”

Below are the five suggested investment strategies for 2012 from WealthTrust-Arizona:

1) Prepare For Possible Change in Estate Tax in 2013
Unless Congress intervenes in the next 12 months, in 2013 estate tax law will revert back to a $1 million exemption and a 55% tax rate. That means the coming year will present you with a unique opportunity to structure your estate plans so that, after you are gone, your heirs will end up paying the least amount of tax allowable by law on your estate. “You should consider taking advantage of historically low interest rates to provide low-interest loans to your adult children, as well as funding grantor retained annuity trusts, which are known as GRATs,” according to Mike Bowen, Senior Financial Advisor for WealthTrust-Arizona. “If you do not plan in advance, you could end up paying more to the IRS than you need to, rather than to loved ones or a favorite charity.”

2) Always Make Sure to Read the Fine Print Before Purchasing an Annuity    
While fixed annuities promise a steady income stream for life, there is an “opportunity cost.” When you lock up a large portion of your money until the day you die, you are limiting your options when it comes to using that money to participate in an attractive future investment, such as an equities rally. “A fixed annuity will not hold up well against inflation,” warns Bowen. “While they are marketed as being investment vehicles, they are usually not a good alternative to other, lower-cost investments.”

3) Consider Investments That Exploit Volatility and Incorporate Portfolio Protection
It is hard to escape the volatility in today’s market. You can actually use this to your advantage, by investing in volatility. You should do this in a way where the investment does not lose appreciation when the volatility subsides and the markets return to normal. Other risk management strategies include momentum-based sector rotation. “Remember that any risk management product should complement – not replace – any carefully designed asset allocation,” states Bertrand.

4) When Investing in Equities, Consider the Long Term
You should invest in equities up to your personal risk tolerance level, keeping in mind that you are in this for the long term. Do not allow yourself to get wrapped up in the day’s news and election-year politics and potential gridlock, allowing it to all change your long-term investment strategy. Like a good football coach, you should focus on the fundamentals, things like corporate earnings. Investing in equities is a good way to guard against the biggest threat to your financial future: inflation. Even if you are retired, inflation will most likely double or even triple your living expenses over the rest of your life.

5) Diversify, Diversify, Diversify
“At WealthTrust-Arizona, we cannot stress enough the importance of having a diversified portfolio,” states Bowen. “A solid asset allocation, combined with opportunistic rebalancing to ensure your allocations stay true, is still the best way to reduce risk. You should have a well-diversified portfolio that invests across a range of equity sectors, fixed income and alternative investments. An abundance of mutual funds and exchange-traded funds (ETFs) offer exposure to a wide variety of asset classes.”

Typically, investors let their emotions rule their financial decisions, letting fear prompt them to exit and enter the markets at precisely the wrong times, which can harm their results. When turbulent markets and geopolitical uncertainty combine to agitate equities is the time to double down on the basics. Bertrand reminds all investors to “maintain a well-allocated and balanced portfolio that reflects sound investment principles and your long-term needs will help your investments with the ups and downs of the market.”

To schedule an interview with Don Bertrand or Mike Bowen, please contact Iliana Bulnes at PRfect Media at 480-706-6880 x122 or by e-mail at ibulnes(at)prfectmedia(dot)com.

About WealthTrust-Arizona

WealthTrust-Arizona is a fee-based investment advisory firm specializing in the integration of investment management with estate planning for high net worth individuals and families. Services include portfolio management, estate planning, asset and lifestyle preservation, investment taxation planning, access to trust and estate documentation preparation, business succession planning and more. The professionals at WealthTrust-Arizona are frequently sought out by national media outlets such as The Wall Street Journal, Forbes, The New York Times, CNBC, SmartMoney, Kiplinger’s Personal Finance, Fox Business Network and others to share their thoughts on matters that impact affluent investors. For more information about WealthTrust-Arizona visit


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