Morgan Stanley Smith Barney Advises Lake Mary Seniors at Oakmonte Village
#1. Learn to save more. A portfolio of stocks purchased in 2000 and left untouched has likely lost some of its value—and may continue performing sluggishly for the next several years. Clearly, great stock market expectations can’t form the basis of your long-term financial strategy.
Saving more of your income makes sense for two reasons: Most importantly, substantial savings can cushion you from suboptimal portfolio returns. What’s more, having cash lets you take advantage of potential bear-market bargains. After all, what good is a single-digit sale price on that once-skyrocketing blue chip if you don’t have the funds to buy it?
#2. Work on your balancing act. As investors tentatively duck in and out of the markets, volatility will likely persist. That’s why it’s wise to build and maintain a mixture of stocks, bonds, cash and other investments in your portfolio that’s in line with a long-term financial strategy.
Market shifts can easily disrupt your allocations. For instance, when stocks nosedived in 2008, your portfolio’s equity weight likely shrank as your allocation to bonds or cash expanded. In that case, a December 2008 re-balancing could have helped keep you on track—and in line to potentially benefit from the mighty comeback that began in March 2009.
But re-balancing makes sense in calmer markets too. When you rebuild assets that have lost ground and liquidate a portion of appreciated assets, you’re more likely to reap the benefits of a buy-low/sell-high scenario. We can work with you to help you develop a re-balancing schedule, along with a strategy for adjusting asset allocations as you respond to market fluctuations.
#3. Protect your home’s value. Borrowing against a home or any other core asset is a useful financial tool, when done judiciously. But when home prices surged early in the last decade, many homeowners saw home equity loans as a safe means of financing everything from home improvements to a second honeymoon in Barcelona. Now, with most real estate markets having experienced a precipitous fall in value, many otherwise prudent investors have learned that with great returns also come great risks. Bottom line: you can’t do much about market rates, but you can certainly maintain as much of your home’s liquidity as possible by borrowing against it with discretion.
The next 10 years could be a decade of uninterrupted prosperity or economic hardship—or anything in between. But regardless of economic and market conditions, sticking to this trio of financial fundamentals can help you achieve your most important goals.
Asset allocation and re-balancing do not protect against a loss in declining financial markets. There may be a potential tax implication with a re-balancing strategy. Please consult your tax advisor before implementing such a strategy.
Past performance is not indicative of future results
This information provided to you by:
JOE KELLY
FINANCIAL ADVISOR
Morgan Stanley Smith Barney
250 S. Park Avenue, Ste. 500
Winter Park, FL 32789
Phone: (407) 740-4972
Toll Free: (800) 829-5105 ext. 4972
E-mail: Joseph.P.Kelly@MorganStanley.com
Oakmonte Village is a new 25-acre luxury senior living community in the heart of prestigious Lake Mary, Florida. Ideally located for ease and convenience, Oakmonte Village is within easy reach of many local Orlando amenities such as parks, walking trails, lakes, and more. For more information on our Senior Living Community contact us today.
Julie Fernandez, Director of Marketing
Oakmonte Village at Lake Mary
407.732.5800
www.oakmontevillage.com
Orlando Senior Living | Oakmonte Village February 5, 2010
