Devising a financial strategy for 2013? These wealth managers advise smart moves now

Smart Money

With some previously unknown circumstances now resolved—an election concluded and government reconfigured accordingly—individuals and households may be wondering what tweaks might be necessary in their financial portfolios in the coming year. We asked seasoned experts for advice on where to start.

Tom Pacilio/senior managing director of Pacilio Wealth Management: “For the individual investor, 2013 is the ‘year of the confused.’ The fiscal cliff, potential tax hikes, financial reforms—what to do? Our advice is that, while there is still tremendous opportunity in the markets, proceed with caution….While investors should know the risks are real, opportunities exist in traditional and nontraditional investments. One area is real estate in the form of Student Housing or Apartment REITs (real estate investment trusts). It is a great inflation hedge, demographics are strong, with excellent cash flow combined with the prospects of price appreciation from the properties.”

Margaret Preston/managing director and market executive at U.S. Trust: “To prepare for an environment with possible higher taxes and reduced government spending, we’re considering how certain vehicles and philanthropy can be used to lower clients’ taxable income. Investors may consider investing in municipal bonds, since that income is currently free from federal and most state taxes.”

George Venizelos/managing director-investments at Wells Fargo Advisors, LLC, with his firm’s equity strategists: “Concerns over the elections, the ‘fiscal cliff,’ and the European debt crisis have, to some extent, been built into the domestic equity market valuations. Should one or more of these issues become greater problems than expected, a downdraft in stocks could result; at this stage of the recovery, we think pullbacks represent an opportunity to accumulate stocks. Some of these uncertainties will be pushed out into the future, and others may result in near-term discomfort, but we believe the marketplace has already given some thought to these now relatively known issues.”

John Vaccaro/CEO and founder of Westport Resources, with Joseph Tatusko, chief investment officer: “What should you do in this environment? We’re all saving for the future, either for asset growth for times that are long down the road or for income for those living on their investments. Given these needs, it’s absolutely necessary and prudent to get invested…and stay invested and avoid trying to guess or time the market.”

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