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Wealth Management - Investment Sounding Board
Where are you advising clients to invest while still remaining cautious?
Florida Trend posed this question to 11 financial advisors - here are their answers.
Mike Davis
Founder/CEO
Resource Consulting Group -
Orlando
 Mike Davis |
"We recommend an allocation of stocks and bonds based on each client's time horizon and risk tolerance. If we recommend a 60/40 mix of stocks and bonds, we will rebalance when things get out of whack, but we don't do it in anticipation of changes in the economy or markets. The emerging markets had a horrible year in 2011. We had trimmed holdings in January 2011 because this asset class had done well for several years and had outgrown our target allocation. We put that money in underweighted U.S. large value and small value equities. Now, since the markets have done well in the last quarter of 2011 and early 2012, we're selling equities and buying bonds. Our clients have nine or 10 equity mutual funds in their portfolios, divided between U.S. and foreign stocks, value stocks, small-cap and large-cap stocks and, for some clients, REITs. We also invest in three bond funds but keep the credit quality high and the maturities on the short end. We don't keep cash intentionally because it's a drag on long-term returns."
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