Finding the Positives in Market Volatility: Independent Financial Professional Offers Five Tips to Take Advantage of Opportunities Created by Market Uncertainty

SAN DIEGO, CA, September 24, 2010 (Press-News.org) John Jenkins, president and CEO of San Diego-based suggests five moves that can help position a portfolio for any number of unknown events that could range from inflation or deflation to stagflation and even for depression or recovery.

To hear an interview with John Jenkins on market volatility, visit http://www.audioacrobat.com/play/WNzHRv8f

The stock market downturn is showing no signs of sustained improvement and has many investors suffering from motion sickness as a result if the wild market swings. John Jenkins, president and CEO of San Diego-based Asset Preservation Strategies, Inc, believes investors should learn to embrace market volatility as a way of life in order to survive and maybe even profit.

"Having gorged on debt for 25 years, the world's big economies are now paying the piper for spending well beyond their means," says Jenkins. "And because this reckless spending occurred at all levels of government and extended to individuals, the result is instability seen at all corners of the world's economies."

Jenkins acknowledges that there is no high-level calculation or crystal ball that can dictate how long this market volatility will last or whether the ultimate recovery will be V or W shaped. "What we do know is that for the foreseeable future, volatility will be one of the only constants as we struggle to adjust to slow economic growth, diminished investment returns, higher unemployment, tighter credit, the threat of inflation and rising interest rates," he says.

The most prudent response, according to Jenkins, is to follow the advice former Chairman of the Federal Reserve Alan Greenspan gave when he said a "tectonic shift in fiscal policy" is needed. "Buy and hold is dead," says Jenkins. He points to the current volatile and uncertain market as evidence. "Many investors have gotten killed using a buy and hold strategy. But today's market requires an investor to be willing to make tactical moves in addition to strategic decisions in order to capitalize on the opportunities market volatility creates."

Source: http://blogs.wsj.com/economics/2010/06/18/secondary-sources-greenspan ... -bailouts/

Jenkins suggests five moves that can help position a portfolio for any number of unknown events that could range from inflation or deflation to stagflation and even for depression or recovery.

1. Buy good stocks. Take profits. Everyone loves a sale, so when stock prices dive, look for good companies selling below their intrinsic value that offer potential for growth. "If a stock you acquire happens to appreciate rather quickly and no longer seems fairly valued, take advantage of the volatility to sell it and allocate your capital to another undervalued security," says Jenkins.

But he cautions investors to anticipate higher capital gains rates, particularly if the portfolio includes appreciated assets and advises that this year might be a good time to take some gains off the table at the maximum capital gains rate of 15 percent, rather than higher rates in 2011. "The decision to sell investments to accelerate gains or defer your gains to the future should be informed by your goals, risk tolerance and time horizon," says Jenkins.

2. Invest globally. As government debt soars, many experts believe that the US dollar will lose its role as the world's reserve currency. At the same time, growth is occurring in the developing world, specifically in the emerging markets of India and China. "While conventional wisdom has suggested investing a maximum of 25 percent of your stock portfolio abroad, it may be time to increase that allocation, especially given that more than 60 percent of the world's total stock market value lies outside of the US," says Jenkins.

3. Take more responsibility. "With the pending surge in baby boomer retirees meaning that the currently unfathomable national fiscal pressures will intensify, individuals must take more responsibility for their own retirement," says Jenkins. In today's uncertain economy, the only things that can be controlled are what is saved and what is spent. "It's really rather simple. If what you sock away is going to grow more slowly, you need to save more. If you are already retired, you may need to withdraw less." When looking for places to cut household expenses, Jenkins warns not to forget about investment costs.

4. Guard against inflation. The market's ups and downs can be painful in any period of inflation. Short term hedges in assets including commodity futures, gold and oil that tend to increase in value as inflation creeps up or with a total return strategy designed to outpace inflation over the long-term. "Choose hedging and you could forfeit some long-term growth," Jenkins says.

5. Consider new products. Investors comfortable taking on additional risk might gravitate to smaller-caps or high yield bonds. Conservative investors might consider income-producing stocks or investment grade municipal bonds. Jenkins says, "Because financial companies are responding to retirees worries about their ability to generate income that will last throughout their retirement, it's important to watch for new products designed for the uncertain market environment."

About John Jenkins and Asset Preservation Strategies, Inc.
John Jenkins is president and founder of San Diego-based Asset Preservation Strategies, Inc., which provides a team of financial professionals collaborating to address all of the elements of successful wealth management. He has conducted numerous financial planning workshops during his career and has been a guest on the PBS show "The Money Makers" and its successor, "The Financial Advisors," as well as the syndicated news magazine show "Heartbeat of the City." Jenkins has also authored and co-authored several financial planning books and publications. He is frequently quoted in the financial press, including Financial Planning News, The San Diego Union-Tribune, the La Jolla Light and the San Diego Business Journal. He has been named for three years in a row as a 5 Star, Best in Client Satisfaction Wealth Manager by San Diego Magazine based on surveys of more than 30,000 clients of wealth mangers and data from more than 4,000 financial service professionals. Learn more at www.asset-preservation.com.

Securities offered through Securities America, Inc., Member FINRA/SIPC, John Jenkins, CA Insurance License #0647708, Registered Representative. Advisory and tax services offered through Asset Preservation Strategies, Inc., a SEC Registered Investment Advisor. Asset Preservation Strategies, Inc. and the Securities America Companies are separate, unaffiliated entities.

The FIVE STAR Wealth Manager list is created by Crescendo Business Services LLC. It includes less than 7% of wealth managers in the San Diego area in 2009 and reflects those scoring highest in client satisfaction. Wealth managers where identified by surveys conducted with 200,000 consumers and 10,000 financial professionals, and evaluated across nine attributes-customer service, integrity, knowledge/expertise, communication, value for fee charged, meeting financial objectives, post-sale service, quality of recommendations, and overall satisfaction. Favorable and unfavorable evaluations are included in the score. Each wealth manager is reviewed for regulatory actions, civil judicial actions, and customer complaints. Wealth managers do not pay a fee to be included in the research or final list. Scores reflect an average of all respondents and may not be representative of any one client's evaluation. Working with a FIVE STAR Wealth Manager does not guarantee investment success.

All investments involve risks.
Municipal bonds may subject investors to the Alternative Minimum Tax (AMT). Municipal bonds are usually exempt from state and local taxes, though discount bonds may be subject to capital gains tax.
High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal.
Smaller cap stocks entail additional risks because they may be more volatile than stocks of larger, more established companies.
Bond investments involve the risks of price fluctuation and the issuer's credit quality.
Investments in REITs are subject to the inherent risks of direct investment in real estate such as price fluctuation, liquidity, and concentration risks.
Investments in foreign markets entail special risks such as currency, political, economic and market risks. The risks of investing in emerging market countries are greater than the risks generally associated with foreign investments.
Asset Allocation seeks to maximize the performance of your investment portfolio using diversification and disciplined investing. Diversification can be thought of as spreading your investment dollars into various asset classes to add balance to your portfolio. Although using an asset allocation methodology does not guarantee greater returns or against the risk of loss in a declining market, it may be able to reduce the volatility of your portfolio.
The opinions and forecasts expressed are those of the author, and may not actually come to pass. This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security. Past performance does not guarantee future results.
Investing in commodities is often through futures trading, where the risk of loss in these contracts can be substantial. You and your advisor should carefully consider whether such trading is suitable depending on your financial situation. The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. In some cases, managed commodity accounts are subject to substantial charges for management and advisory fees. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account.
Precious metals are subject to unique risks and costs, such as cost associated with the storage of the physical commodity. As many precious metals are designed as a counter to inflation, they are likely to perform poorly in advancing markets. Precious metals are also subject to illiquidity risks as there may be no secondary markets to buy and sell the commodities. Additionally, the commodities/precious metals markets have historically been very volatile as precious metals are subject to greater fluctuations in price and as such are not suitable for all investors.
Sector rotation involves the risk that the stocks of many of the companies in one sector can fall in price at the same time because of an event that affects the entire industry. Recommendations based on sector analysis may not take into account individual client suitability. You should discuss the appropriateness of such investment strategy with your financial advisor.
CD's are FDIC insured up to $100,000, retirement accounts up to $250,000, and offer a fixed rate of return. They do not necessarily protect against a rising cost of living. The FDIC insurance on CD's applies in the case of bank insolvency, but does not protect market value. Other investments are not insured and their principal and yield may fluctuate with market conditions.
Securities America and its representatives do not provide tax or legal advice. Please consult your tax advisor or legal counsel concerning your particular situation.

Written by John Jenkins, Securities America, Inc. Registered Representative, in conjunction with Impact Communications.

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