Election and Investment Planning

The election of 2012 is finally here. How will this affect your financial future? How will this affect your investment decisions?

For many, the election and the impending “fiscal cliff” have been influencing their financial decision making. For some, these issues have led to a lack of decision making, as they are waiting for these issues to be resolved, before moving forward with financial decisions. Some are even waiting to allocate funds to stock investments until they can “see” more clarity.

For our clients, we have been discussing these issues, but have certainly not allowed these issues to control our decision making or our actions. We adhere to the following motto: focus on what you can control and focus on things that matter, and especially when these two intercede.

How does this apply to the financial advice we have been giving to clients throughout 2012?

We have adhered to the financial plans that we have developed for our clients. For clients with stock allocations, that has been very beneficial during 2012. With many US and International broad stock averages up by approximately 10-15% for 2012, this is far superior to just holding cash, while waiting for these issues to be resolved.

We have actively pursued various strategies for our clients, to take advantage of the market volatility which has existed in 2012.

  • For clients that purchased stock funds in early 2012, we did tax loss selling in the 2nd quarter of 2012, when the market declined. If we had not done this at that time, and waited until now, there may not be tax losses to harvest. Thus, these clients will have tax benefits, and still have unrealized gains. Our clients benefit from our monitoring of tax loss selling throughout the year, not just at year end.

    We have met with clients during the year, and assisted them with their estate planning matters and charitable gifting (working closely with their attorneys). The future of estate tax rates is not known. However, with uncertainty comes opportunities that must be addressed and analyzed.

    Once the outcome of the election is determined, one aspect of uncertainty will be removed. However, many issues will remain unresolved. Uncertainty will always exist, it is just the issues that change. As advisors, we guide our clients to handle these unknowns.

    No one has an accurate crystal ball to know what the financial and tax impacts will be regarding the “fiscal cliff” issues, and how they will be resolved. Many “Wall Street experts” will make post-election predictions and recommendations, but do they really know? Will they be accurate?

    Our investment strategy is not based on guesswork. By developing a globally diversified portfolio, we provide a solid and effective investment strategy. We know that structuring an investment portfolio that minimizes taxes and can reduce dividend distributions (if desired) will always be advantageous, and this is one of the strengths of our firm.

    We know that decisions must be made. By assisting our clients with these decisions, we enable them to have the comfort and financial security they desire.

    In these times of change, volatility and uncertainty, we can assist you with your important financial and wealth management decisions.

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