Investment Strategies for 2012
Posted on Wed, Feb 01, 2012
While I generally don't like to prognosticate the future, I've been forced into it by the spat of recent user requests for me to comment on what I think will happen in 2012.
In short, I believe that within the next 12-18 months a bull market will emerge and continue for some time. Why? The housing market will begin to recover by mid- to late year; a manufacturing renaissance appears to be gaining a foothold; fiscal responsibility is now on everyone’s mind, including the idiots in DC; the 35-39 year olds are just now beginning to save for retirement via investment; the US is finally moving towards oil self sufficiency; and technological innovations are emerging faster than ever and the US is leading the charge. Bottom line, the economy is likely to get a lot better.
So, here's my investment strategy advice for 2012 (remember what you paid for it ... nothing) if you DO NOT NEED your capital anytime soon, your Bloodhound portfolios will likely recover and sprint ahead over the next year or two. In other words, stay the course.
However, even if you're tempted to give up completely on your chosen strategy, I don't recommend that you sell your holdings UNLESS you can use the losses to offset gains. If you can’t, then all you’re doing is locking in the losses with the hope that a new approach will rocket you ahead. Given that most Model Strategies have done well over the long-term, you might be better off going forward with them rather than making a change … provided you buy into my thesis stated above. If you don’t buy into it, then if, and only if, you can use the tax losses I’d make the switch to a new strategy.
Terrence T. Sullivan, President and CEO
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