Your Money Matters: Investing in 2013

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

Maury Fetig

Looking Ahead to 2013

While a recession is possible it is still highly unlikely. We may temporarily go over the cliff, but if action does not take place in 2012, early 2013 is very likely.

Don’t be underinvested in Equities. With cash earning zero and bonds rates surprised, the hurdle rate for stocks is very low and belong in most any diversified portfolio. They are one of the few assets that can appreciate over the long-term in an inflationary environment.  25% is the bare minimum for most investors.

Don’t be overexposed to long maturity Bonds. One day rates will rise and the Fed nicely outlined this for us last week. Higher rates could come as early as mid 2014.

Diversification continues to be important. Don’t rely on single stock picks unless you are properly diversified.

Avoid buying municipal bonds. Risk vs reward makes little sense now. Rates are 1-2% and have many pitfalls ahead with respect to possible partial taxation and growing pension issues.

Relative Value Partners

www.rvpllc.com/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s