[caption id="attachment_34407" align="alignright" width="324" caption="George McCuen, Ed Osborn, Ron Wargo and John Whiting "][/caption]
NORTH BAY -- The North Bay Business Journal asked wealth advisers for some advice in the continuing uncertain economic time.
What should clients and potential clients know about today's economic climate in terms of wealth management that differs from six months ago, a year ago and five years ago?
What are the questions clients are asking?
What are things to do and to avoid doing in regards to investment portfolios?
The advisers are presented alphabetically.
Michael Gradl is the senior vice president of Investment Services at Redwood Credit Union. He has more than 20 years’ experience in the financial services industry, and has managed Redwood Credit Union’s Investment programs since 2005.
Mr. Gradl's answers:
1. Those seeking to invest should understand the economic environment is changing constantly, and it plays a role in short-term portfolio performance. It’s important to stay focused on the long-term journey and not be distracted by short-term fluctuations. The U.S. is slowly coming out of the recessionary environment, however, until housing stabilizes and employment improves, we may continue to experience volatility in the capital markets.
This perspective hasn’t changed much from six months ago, however the issues in the Middle East, the significant increase in oil prices over the past year, and the Federal Reserve’s quantitative easing program coming to an end have shaken the confidence of many investors.
Five years ago there was a different economic picture with much leveraging of assets and a more confident outlook on the future of wealth accumulation. Those with a widely diversified investment portfolio weathered the storm much better than those who became overburdened with debt when the housing crisis took hold, which is a good lesson learned.
Finally, the U.S. economy is driven by consumer spending, and consumer spending fell sharply during the recession. Consumers have been reluctant to spend as unemployment remained high, but there are some signs lately that consumer spending is rebounding. This will bode well for further economic recovery.
2. After seeing my investment portfolio diminish during the down economy, how and when can I retire, and what can I expect for a retirement lifestyle? I hear a lot about commodities, gold and hedge funds. Do these things make sense for me to invest in? Gas and food prices have gone up – how does all of this inflation affect me and my savings and investment goals?
At RCU, our CFS Financial Advisors respond to these questions only after listening closely to better understand each individual’s unique financial situation and goals, in order to determine the best solution based on his or her individual circumstances.
3. One of the worst ideas, now or at any time, is to put all your eggs in one basket and/or speculate on areas of investing where you do not have the appropriate knowledge to make sound investment decisions, or don’t have access to a professional who has the expertise to advise you accordingly.
One of the better ideas at this time is to continue to invest in equities in a diversified manner and balance your approach, since “traditional” investments such as CDs, treasuries and money markets will not maintain your buying power (inflation) over a longer-term period.