Patrick Dwyer
Managing director-investments/private wealth adviser - Merrill Lynch - Miami

[Photo: Brian Smith]

"Within our fixed-income asset allocation, we don't advise having cash. Instead, we have municipal bonds and corporate bonds for those who want to be supersafe. There's low return but high safety. Bond portfolios should be as diversified as equity ones.

Where we're trying to gradually increase our exposure is emerging-market bonds. We're looking at countries with less debt and better growth prospects. We think over the longer term, the risk of owning long-duration bond markets in the U.S. and European markets is high.

Our equity allocation is balanced and diversified. We're focused on U.S. stocks that pay a dividend. This is not a fixed-income alternative. We're investing for growth, not the dividends. We're also invested in higher-dividend yielding stocks in emerging markets. In our equity portfolios, I think you will see a gradual bias toward emerging markets. This is where we think there may be opportunity. We believe that the dollar might decline, and as a result you may want to own stocks and bonds in countries with currencies growing faster than ours. Our investment in global REITs should also get larger over time."

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Adam Carlin
Director-wealth management/senior portfolio management director - Bermont/Carlin Group at Morgan Stanley Smith Barney - Coral Gables

"We favor investing in the stock of companies that pay high dividends — preferred stocks and convertible preferred stocks of high-quality companies. We also have invested in master limited partnerships (MLPs). We like natural gas line MLPs. Investors in MLPs usually have the added benefit of having a portion of the cash flow distribution these partnerships pay being tax-deferred and even shielded from ordinary income taxes. Another area we have invested in is REITs, or real estate investment trusts, as well as mortgage REITs when appropriate. Clients need to be willing to take a high degree of risk, but they can get a high degree of cash flow, which can be attractive. We also like corporate bonds. As a rule, we typically favor buying companies that are rated investment grade and in some cases have seen improvement in their balance sheet. For investors in a high tax bracket who may not need cash flow, we've been investing in zero-coupon municipal bonds. Because these bonds don't pay interest payments, they often generate a higher tax-free rate of return to the investor."

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L. Scott Merritt
Senior vice president/investment director of Florida PNC Wealth Management - Sarasota

"Our preference is high-quality, dividend-focused, large-cap stocks. We prefer those with a blend of a good income stream and a propensity to increase their dividend and those that have positioned themselves to be part of growing economies, such as multinationals. We are suggesting clients look at REITs. We also have an allocation for emerging markets."

TopRank Florida™ 25 Largest Trust Banking Firms - 2012 Florida's Largest Trust Banking Firms ranked by total Florida Trust assets.

Mari Adam
President - Adam Financial Associates - Boca Raton

"I think you still need to diversify off the well-beaten path. I see people who are afraid of the market, and they stick to ‘safe' investments like CDs. I advise not to do that. If you want a return over 1% and enough long-term growth to make sure your money doesn't run out too early, you have to get involved in the equities market to some degree.

I still believe in maintaining a diversified portfolio. I like U.S. equities as the core of the portfolio. I still also like multinational companies, especially attractively priced companies based overseas that are doing a lot of business in the emerging markets. We also like to maintain positions in REITs, commodities and natural resources to protect against inflation down the road, although now we are not overweighting these holdings.

We like to use some municipals in the portfolio because they often yield more than Treasuries. We also like high-quality corporate bonds and strategic bond funds that look for opportunities across the globe."

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Ted E. Furniss
Managing director/senior investment adviser for Florida Wilmington Trust - North Palm Beach

"Clients are extremely cautious, even though interest rates effectively are at zero. You're really not getting anything on money-market accounts, and when you back out inflation and taxes on the yields on the average 10-year Treasury bond, you're essentially paying the government. A better option is the equities market. We like quality dividend-paying U.S. stocks that are attractively valued. If you look at a company like Altria, its dividend yield is greater than the current yield on its bonds maturing in 10 years. As an investor, the odds are much more in your favor that you will come out ahead owning the stock over this time period. There are values being created in Europe based on what's going on. Last year, emerging markets were hit hard, but we still have it as part of our allocation. We have various funds to invest in those markets that pay yields around 4% while we wait for appreciation in the underlying instruments."

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Joe Krier
President - Krier Wealth Management - Jacksonville

"We're staying conservative. We have 30% to 40% invested in the equities market. The areas we like are dividend-paying stocks mostly in oil and gas and healthcare. We're believers in biotech, pharmaceutical and North American energy, particularly in an election year. We're buying into those areas using exchange-traded funds (ETFs). Those tools are liquid, transparent and inexpensive. We're not buying with a long-term perspective. We're not even expecting to stay invested through the end of year. The way volatility was in 2011, you can't be complacent and expect to buy and hold. I think there is opportunity in large-cap tech stocks. We believe the U.S. market is one of the better places to invest right now. We prefer to stay with the high-quality and short-term fixed-income investments. Regardless of what we own, we always have our finger on the sell button. We don't want to be married to any position."

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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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Charles A. Vilar
Wealth management adviser/vice president - BB&T Wealth Management - Miami

[Photo: Donna Victor]

"We're recommending our clients stay in domestic equities rather than international stocks. We like high-dividend stocks such as the big pharmaceuticals or blue chips such as IBM or Exxon, which are well-capitalized. There is lot of money on sidelines in money markets and CDs because investors want to stay safe rather than earn interest. We're advising against that. We would rather see someone in corporate and tax-free municipal bonds."

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Scott M. Kellett
Executive vice president/market executive - Sabadell Bank & Trust - Naples

"Right now we are looking for opportunities to buy equities on the dips. We are interested in companies in areas that are overlooked and pay dividends, often in Europe or South Korea, anywhere where we believe there's value. One example might be a Spanish telecommunications provider with a virtual monopoly that does at least 45% to 50% of its business outside the eurozone and pays dividends. While some investors shy away from Europe, we favor large-cap and mega-cap European stocks.

We also like high-quality U.S. stocks that pay dividends. We're very cautious about the bond market right now. While bonds have a place in a portfolio, we are avoiding putting new money into the bond market at historically low yields. Our investment strategy is pretty plain vanilla right now."

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Alex H. Navarro
Senior vice president/private financial adviser - SunTrust Investment Services - Bal Harbour

"A lot of people are investing too conservatively — like a 70- or 80-year-old. Their money is not growing enough to fund their retirement. We are using products that have minimum income guarantees. As part of an investment portfolio, we're suggesting solutions that guarantee income for life. They allow you to put a certain amount of money into equities but guarantee an income until the day you die. We recommend matching fixed expenses to fixed income and adding pension replacement products. For the long term, I recommend being in as aggressive a portfolio as you can tolerate. A more moderate portfolio might have 60% stocks, 40% bonds. An aggressive portfolio would have 80% stocks and 20% bonds. We are slowly starting to increase our exposure to the international markets. They've been through the ringer, but we want to buy low with the belief that they will turn around."

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Scott Poulin
Director of Florida Wescott Financial Advisory Group - Miami

"We believe in keeping some of a client's portfolio liquid. Whatever a client's expenses are, we multiply that between two and four and keep that in cash or short-term bonds. That way, if we have a repeat of 2008, we're not selling something at the wrong time.

We are recommending an asset allocation that includes three categories: The first is stocks — domestic and international; the second is fixed income. We like government and corporate bonds of high grade; the third category includes some alternative investments in energy master limited partnerships, global REITs and natural resources. Rather than investing in gold futures contracts, we buy into the company that manufactures or produces the gold. For the more conservative clients, we suggest more bonds or fixed income. For the more aggressive, we recommend more equities and alternatives.

For the long term, I'm concerned about being too aggressive in bonds. There's potentially another bubble on the horizon. Bonds have only one way to go, and that's lower in value. I think international stocks are where the value is. I think it's better to have a healthy exposure to equities rather than running into the bond market."