InsuranceNewsNet Magazine January 2012 : Page 45
THE ART OF CREATING A BLENDED FINANCIAL PLAN | FINANCIAL Although you can always expect the market to rise and fall over the long term, stocks have considerably outperformed other asset classes. You can also try investing in some-thing your client is passionate about. Unique, alternative investments are quickly becoming some of the most prominent and profitable assets in a retirement portfolio. Sectors Identified As BEST CHANCE F or BIGGEST GAINS In Following Year 54% 57% 49% 49% 44% 49% “PNC Wealth and Values Survey— Investors’ Outlook” – A survey conducted among a nationwide cross section of 1,105 adult millionaires. Transforming Clients’ Passions into an Alternative Investment Alternative investments have made quite a mark in the wealth management world. These unique options stray from the three traditional asset types—stocks, bonds and cash. It’s important to remem-ber that a blended financial plan goes beyond stocks, annuities and life insur-ance —which is why many of today’s investors are taking into consideration real estate and commodities such as gold and silver. Real estate especially offers opportu-nity for big gains, but investing in prop-erty is often a lot more complicated than investing in stocks or bonds. Clients can immerse themselves in real estate invest-ment in many ways, such as real estate investment groups, real estate trading or simply investing in acres of land. Land is highly attractive for individuals looking for long-lived assets. And now is a good time to buy, as global demand is steadily increasing. There are land “classifica-tions” as well, depending upon what you are looking for—farmland, timberland or better-use land, commonly used for development—have all seen the poten-tial for value appreciation. Another alternative investment grow-ing in clout is high-end collectibles. Col-lectibles are a physical asset that will appreciate in value over time and most often these assets are rare or coveted by niche groups. What are your clients passionate about? Do they enjoy fine wines? Con-sider investing in a winery or building a collection of distinct vintages that can increase in value over time. Are they lovers of antiques or classic art? Auc-tions occur all across the country and 2011 2010 19% 29% 11% 21% 11% 16% 7% 10% 13% 7% Technology Energy/ Utilities Health Care Financial Socially Responsible/ Green Investments Manufacturing Transportation Retail many investors—both young and old— are using these as prime opportunities to turn something they love into a signifi-cant piece of financial security. Because the maturity for a collectible can vary widely, it makes the act of acquiring them that much more exciting and personal for the individual. Invest Like a Pro in 2012 Although the unsteady economy over the past few years has left some weary of true investment, taking hold of financial plan-ning now is the first step toward efficient wealth management. Many of our country’s wealthiest peo-ple aren’t letting the ups and downs of the economy scare them away from invest-ing, according to the 2011 “PNC Wealth and Values Survey—Investors’ Outlook”. In fact, when the American million-aires surveyed were asked what changes they’ve made to their investments over the past three months, 69 percent said that they “left their investments largely as they were,” while 20 percent said they “moved money into cash or cash equiva-lents.” And, interestingly enough, another 8 percent said they “invested in gold.” When these affluent investors were asked what sectors they expected to see the biggest gains over the next year, the top three stocks remained the same as those identified to be the best the year prior: technology, energy/utilities and health care. While at the same time, on a year-to-year basis, the retail and socially responsible/green sectors lost the most investor interest. Clearly, advisors have many options for customizing a client’s portfolio. Being flexible and continually evaluating how the investments are performing, how-ever, are crucial to turning a client’s pas-sion into a sound investment strategy that paints a promising financial future. And, remember, the most impor-tant aspect of effective wealth man-agement is to craft portfolios that complement each client’s unique life picture. Brian Tarpey , president of The Tarpey Group, is a widely recognized insur-ance and financial professional, having been awarded Top of the Table honors by the MDRT. He can be reached at Brian.Tarpey@innfeedback.com. January 2012 InsuranceNewsNet Magazine 45
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