UNITED ADVISORY PARTNERS 5 TOPTIPS TO NAVIGATE TODAY’SMARKETS- United Advisory Partners
FOR IMMEDIATE RELEASE (Free-Press-Release.com) April26, 2012 -- Here we highlight 5 basic tips everyone can utilize
With market uncertainty once again making headlines, many investors are seeking the relative stability of cash and cash-like investments. While this approach may make sense for those with short time horizons or who are particularly risk-averse, UAP cautions against making drastic changes to your portfolio, at least without careful prior consideration.
Why? Throughout our 50-year history, we‘ve seen that quick reactions to market moves can come with a high price — and may significantly affect your ability to reach long- term goals. For most investors, those goals involve growing and/or preserving wealth.
To help you keep the proper perspective, we‘ve highlighted five sound strategies that are worth considering in this period of market uncertainty. 1. Stay Focused – Stay Invested 2. Discover Power Dividends 3. ‗Dollar Cost average‘ Your Way Through Tough Times 4. Go Global With Your Asset Allocation 5. Get Professional Advice
Stay Focused — Stay InvestedThe old adage say, ―It‘s always the right time to invest‘ however we all know that there can be times when that is the last thing it looks like we should be doing. History proves that staying in the markets is substantially safer than trading in and out. People looking long tern need to understand the investments they have and how they may be susceptible to economic data, market trends and news that can affect the exchanges as a whole and not just a single stock.
Making sure you‘re invested in financialvehicles that weather these dips isparamount to surviving them.The lesson here is that it takes resolveto run counter to ―the crowd,‖ but that‘sprecisely the strategy that can potentiallypay the bigger rewards.
• Discover the Power of DividendsDividend income, from both equity andbond fund investments, can play animportant part in an investor‘s portfolio —especially in periods of slow or uncertaineconomic growth. Therefore, it‘s importantto keep these two points in mind:
Dividends Have Historically Contributed toHigher Long-Term Total Returns Fixed incomeinvestors generally have been rewarded by theincome component of bond funds, which can tosome degree balance price declines in turbulentor rising rate environments, for example. Thisconcept also applies to dividend-paying equities.Attractive equity returns are derived not simplyfrom the receipt of dividends but from theaccumulation of shares as a result of thereinvestment of those dividends, whichhistorically has been a key driver of equityreturns over the long run.
•“Dollar Cost Average” Your Way Through Tough TimesIf you‘re concerned about capital risk in today‘smarket, we suggest a systematic approach — dollar-costaveraging (DCA). DCA involves investing a fixed dollaramount at regular intervals over a selected time period. Toillustrate this point, consider that over the past decade, onaverage, Investor B, who followed a DCA approach(e.g., 10 monthly investments of $1,000), would havehypothetically achieved more shares purchased thanInvestor A, who had made a $10,000 initial investmentwith no subsequent contributions.In fact, during both periods when the stock market wasmost turbulent, a DCA approach would have purchasedsignificantly more shares at a lower average cost.
•Go Global with Your Asset AllocationThe goal of asset allocation is simple: To identifya mix of assets that will provide the highestpotential for return, given the level of risk you arewilling to assume. This is best achieved bybalancing your risk over several or as manyexchanges, markets, countries as you haveaccess to. Note that the asset allocationapproach may also be greatly enhanced byutilizing a broader reach than a traditional U.S.-centered portfolio, and investing across the worldmarkets.
Since the world economies are at varying pointsof a sustained global economic recovery, andwith many of the developing markets providinghigher growth rates than most developednations, investors can potentially capture thegrowth opportunities across the global markets.Furthermore, by combining fixed income andequity investments, some of which havehistorically low correlations with oneanother, you may be able to optimizeperformance potential in up markets, but moreimportantly, reduce your overall downside risk indeclining markets.
• Get Professional GuidanceThe principles outlined here will help to get you thinkingabout some sound approaches, especially in the currentenvironment. However, with the many distractions intoday‘s world, it can be hard to stay on track with a long-term perspective. That‘s why a trusted financial advisorcan play a key role in your investment planning andexecution. He or she can objectively assess your risktolerance, goals and time horizon, and help keep youheaded in the right direction. In addition, your advisorcan provide professional insight into current marketevents, and the assurance you need to move forwardwith confidence.
• Speak with your advisor todayUnited Advisory Partners is an independentinvestment advisory firm which focuses on globalequities and options markets. Our analyticaltools, screening techniques, rigorous researchmethods and committed staff provide solidinformation to help our clients make the bestpossible investment decisions. Allviews, comments, statements and opinions areof the authors. For more information go towww.unitedadvisorypartners.com