As May ends, investors have serious considerations. Most will be unhappy with May statements as recent pullback impacted many, on paper at least. Here are my suggestions for surviving the summer regardless of what markets may bring.
May statements and fluctuation
About the time you will be reading this, your May investment statements will be printed and mailed. Many will be disappointed when they see a decline from April. Some will worry that the summer will get worse due to European debt issues. Some will feel frustrated that our big banks continue to traumatize the market.
Put it all aside and consider how we will stay on track. Here are a few things I will be doing for my clients.
Cash balances will remain higher than normal to prevent selling for income and to provide liquidity for buying into the dips.
Higher quality bond holdings such as municipals will replace some foreign and corporate positions.
Value stock will be balanced against growth. Profits from growing equity positions will be allowed to ride rather than further diversifying into riskier sectors right now.
A common sense approach that invests in areas with growing demand will remain focus. For 2012, this has included healthcare, consumer staples, utilities and certain technology.
Investors with low risk tolerance or large individual equity positions will be encouraged to place stops. As always, know your limits so summer fluctuation won’t disrupt your overall plan and outlook.
Most importantly remember why you are investing and don’t let a few bad days curb your enthusiasm.
Until next week,
Susan R. Linkous
All investing involves risk including potential loss of principal.
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