2012 Investment Forecast – A Great Year For Retired Wealth Investors

by Jeffrey-Voudrie

Retirement Wealth Strategies For Your Retirement Income

Let me start by leaving you with my investment forecast for 2012, which I started discussing in my last article, The Investment Climate for 2012 – What the Retired Investor Needs To Know. Of course, this is an election year—possibly one of the most important elections that we’ll see in a long, long time. The outcome of this election may very well determine our country’s ability to change course and begin to navigate itself out of the troubles we are in. It’s time for the silent majority to stand up and make their voices heard.
The stock market normally does well in an election year because the incumbent President tends to do everything possible to spur the economy in order to better their re-election chances. So historically, it’s usually one of the best years in a 4 year Presidential cycle. I don’t know if we will be seeing the same pattern in 2012. If President Obama’s refusal to allow the multi-billion dollar Keystone Pipeline project to be built is any indication, we may not see the wonderful market we normally do in the third-year Presidential cycle.

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An Overview Of Investment Trends for 2012 - What Retired Investors Should Watch Out For

  • I am hopeful though that we will see some seasonal trends resume this year and that we don’t remain in the sideways-type markets we’ve been experiencing in the past months. If new trends develop, I anticipate shifting money back into the stock market from the current cash and/or bond positions.
  • Globally, though, there is more and more evidence that the economy is slowing. China has been the driver of growth for the last decade but that growth recently has begun to slow. Inflation in China and India is increasing and the governments will have to slow the economies in order to combat it. Since China and India are huge importers of natural resources, any slowdown in their economies is going to have an impact in the price of commodities.
  • There has been a lot of talk by those selling financial newsletters about the decline of the dollar, but last year the value of the USD actually increased by around 7%. I believe that it is possible that we will continue to see the USD go up because of the continued turmoil in Europe.

Speaking of Europe, 2012 may be the year that they are no longer able to kick the can further down the road. Not only are most European governments struggling, but so are the large banks that fund their economies.

As a result of all of this, I believe that the stock market will continue to be highly volatile. That said, we can still make money in it with the help of some of the retirement wealth strategies outlined in my  articles, which are designed to profit when the market is trending. I have been testing and anticipate introducing additional strategies that might allow us to profit even in a sideways stock market.

I equally anticipate maintaining the large allocation to bond and bond-oriented investments. These investments did well in 2011 with one returning over 6%, another around 3.8% and yet another with a slightly over 4% return. The inflation-protection investment in gold and silver however had a return of only 2%. So in 2011, it was the conservative investments that did much better than the aggressive ones. I believe that may be the case in 2012.

About The Author

Jeff Voudrie is a Certified Financial Planner and nationally recognized financial advisor. Jeff has been in the financial industry for twenty-five years, and has been interviewed by The Wall Street Journal, CBS Marketwatch, Kiplinger's, The London Financial Times, The Christian Science Monitor, CFO.com and Financial Planning Magazine. For more information on Jeff, please visit: www.jeffvoudrie.com or www.commonsenseadvisors.com

Updated: 03/30/2012, Jeffrey-Voudrie
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