Everywhere you look in the financial press and on the financial cable news shows someone is making their 2012 predictions. Whether it is about what sectors will be hot, actual stock picks, or what have you. This is a fun part of the end of the year and frankly I read a good many of these articles. Fun yes, useful probably not. I do have a few predictions:
• We will continue to see volatility in the markets.
• The financial media will continue to overhype market moves both up and down.
• Jim Cramer will continue to scream.
Trying to pick the hot sector or the hot stock to me is a fool’s errand. Market timing generally ends badly for most people who try it.
Rather in 2012 resolve to take a long view of your financial situation.
Get a financial plan in place. Like taking a car trip, you need a map to know where you are going. A couple of findings from a recent HSBC study support the benefits of having a financial plan:
Americans with a financial plan have accumulated on average $127,000 in retirement savings vs. $56,000 for the average U.S. household. Non-planners have an average of around $23,000 saved.
Almost 44% of those without a plan associate retirement with financial hardship, while this number is only 19% for those with a plan.
Hire a professional fee-only financial adviser. You aren’t getting any younger and the financial planning landscape isn’t getting any less complicated. While this may seem like a self-serving comment, ask yourself how you are doing. Are you earning the type of return you need to achieve your goals? Do you know how much you will need to ensure a comfortable retirement? Does your asset allocation match your goals and your risk tolerance?
Maximize your company’s retirement plan. For many of us our company retirement plan is our biggest retirement savings vehicle and is the most painless way to save for retirement. Manage it as a component of your overall portfolio and your overall financial plan.
My best prediction is that those who make 2012 the year they get their arms around their overall financial situation will end the year feeling like they are in control of their financial future, no matter what the year may bring in terms of market gains or losses.
As always feel free to contact me if I can be of help in any way.
I love seeing a Financial expert not making predictions. Because the predictions are always wrong! As bad as things seem the market continues to rally and vice versa. Virtually every prescient prediction by even the world's greatest investors has been completely disproven. Look at Paulson's collapse, Soros, etc. They're right sometimes, wrong sometimes.
ReplyDeleteThanks for visiting the site and for your comment. The longer that I'm in this business the more convinced that I become regarding the futility of both perdictions and market timing. The best approach remains having a financial plan as the core of your strategy and periodically monitoring your progress and adjusting as needed.
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