Home / Guides / It’s a New Year and Time to Examine Your Portfolio
  • Is Your Retirement Insured?
  • Your resource for learning about, comparing, and selecting the most competitive annuities
  • Retirement is not a dream
Contact Annuity FYI by Phone 1-866-223-2121

It’s a New Year and Time to Examine Your Portfolio

The reality is that you cannot accurately predict the future. What you can do – and what you should do and periodically reevaluate– is determine your long-term investment goals and risk tolerance and craft an appropriate portfolio allocation.
The reality is that you cannot accurately predict the future. What you can do – and what you should do and periodically reevaluate– is determine your long-term investment goals and risk tolerance and craft an appropriate portfolio allocation.

How did your portfolio fare in 2016? Regardless whether it went up or down, was it mostly due to luck or uncanny investment instincts?

Your portfolio almost certainly isn’t limited to annuities. If you prospered in a year punctuated by sharp seesawing, you had to have some luck, most market pros say, and in fact this is almost always baked into the investment pie when performance is strong. If luck eluded you and results were disappointing, did you take it in stride?

As it turned out, the Dow Jones Industrial Average rebounded from its worst-ever start to a year and posted its best performance since 2013, rising 13 percent and generating a total return, including dividends, of 16.5 percent. Nobody predicted that. Wall Street pros got egg on their face, especially when they said the election of President-elect Donald Trump would spark a market sell-off. Instead, we experienced a market rally. .

We also saw a sharp bond market sell-off in the second half of the year – another development almost nobody predicted.

Hence the question – however your investments performed last year, was it luck or skill, and how do you think you will do in 2017?

The reality is that you cannot accurately predict the future. What you can do – and what you should do and periodically reevaluate– is determine your long-term investment goals and risk tolerance and craft an appropriate portfolio allocation. This usually requires the help of a good financial planner. And the start of a new year is the best time to conduct this exercise. Even a simple reassessment makes sense because priorities change over time.

Alternatively, of course, you could try to play the markets. Good luck with that, however. The recent rally may continue, but it has been losing steam lately as investors reconsider prospects for 2017, partly because stocks have become pricey by historical standards. What happens if President-elect Trump’s policies fall short of expectations?

As always, there are lots of questions on multiple fronts. What about foreign markets, especially Europe, which a growing number of investment pros say is being punished too harshly, mostly because of political fears? Regardless, some strategists say a combination of fiscal easing, stronger economic growth and better profits should push stocks on the continent higher. After declining for five years, Morgan Stanley, for example, says European earnings will grow 12 percent in 2017.

And then, of course, there is the bond market sell-off, which is expected to continue, albeit at a more muted pace. Interest rates will continue to rise and bond prices fall, right? But what if they don’t? The bond market has been reacting to expectations that President-elect Trump’s policies will enhance economic growth. But there have been no real specifics. Even if there were, who knows if they would actually be implemented the way they are touted and produce meaningful results?

So what is the answer? Again, we suggest your assess your goals and your tolerance for investment risk, taking the long view. And ask a financial adviser for help. If you have questions or comments, call Annuity FYI at (866) 223-2121 or email us at www.annuityfyi.com and click on Ask Annuity FYI By Email.

— Steve Kaufman

Share Button

Copyright ©2017 AFYI Holdings Group, LLC. All Rights Reserved. No part of this article may be reproduced without the express written consent of AFYI Holdings Group, LLC.

Annuityfyi.com - Prefooter

Contact

Mailing Address:

1165 NE 105 St.
Miami Shores, FL 33138

Email:

support@annuityfyi.com

Phone:

(866) 223-2121

Follow Us On

BBB Logo

Copyright © 2017 AFYI Holdings Group, LLC, All Rights Reserved

Share On Facebook
Share On Twitter
Share On Google Plus
Share On Linkedin
Share On Pinterest