Investors face many challenges posed by an unstable financial market in 2022. Now is always the best time to act to protect your wealth and realign financial goals, which you can do with the aid of a certified financial planner in Utah.
What dangers does the current market pose? Are there ways to protect your assets and preserve your wealth? Yes! We’ll offer some financial strategies to help you weather this season of uncertainty.
Ready to start protecting your wealth? Connect with a Financial strategies Comprehensive financial advisor in Utah!
How Unstable Is the Market in 2022?
After surveying the data from investment outlooks, Bloomberg reports that the word “inflation” appears a whopping 224 times, with some money managers calling it the “key concern” for 2022. Others express concern that the Federal Reserve has raised interest rates at the wrong time, which could signal an economic recession.
Meanwhile, stock prices have yet to fully stabilize, meaning investors face more significant uncertainty from a volatile stock market. Opportunities abound, but so do considerable risks.
Now, more than ever, you need a sound guide to advise you in your financial journey. Partnering with a comprehensive financial advisor in Utah can help you achieve economic resiliency and make informed decisions about your wealth.
Financial Strategies to Protect Your Wealth
There are several financial strategies that you can employ during this period of instability:
Every investor knows not to put all their eggs in one basket. However, it’s essential to diversify your investments within and across asset classes.
For instance, you likely already know to select stock options from various sectors and industries. But your investment portfolio should likewise contain a variety of asset classes, including stocks, bonds, and even tangible property such as real estate.
Rebalance Your Portfolio
Has it been a while since you evaluated your existing portfolio? Now may be a good time to rebalance your portfolio. To rebalance, you’ll simply buy or sell assets if you find yourself underweight (or overweight) in a particular area or asset class.
Doing so has the same net effect as diversification: it helps you manage the risks associated with investing, especially while the market is unstable.
Consider Global Diversification
International companies aren’t affected by the same economic and logistical concerns that American corporations face. This freedom means you might consider using global stocks to diversify or balance your stock portfolio.
Granted, no company is immune to today’s economic challenges, but with careful research, you may discover a new opportunity in an overseas stock.
Remember to Consider Taxes
Tax planning is crucial for any investment strategy, and 2022 is no different. President Biden’s ambitious social spending package never fully materialized by the end of last year, but that doesn’t mean that investors shouldn’t be vigilant and practice continuous tax planning before filing their next tax return.
One change to watch out for is the return of the 60% AGI limit on charitable donations. This limit had been lifted in 2021 but was reinstated as of January 1, 2022. This limit means that if you took advantage of last year’s unlimited cap, you might want to adjust your plans to meet this year’s regulations.
Place ETFs and Municipal Bonds in Tax-Efficient Accounts
Both ETFs and municipal bonds are great ways to diversify your portfolio as well as minimize your tax obligations. The income from muni bonds isn’t taxable at the federal level and is typically tax-exempt at the local level.
Some investors may even have an account manager help them actively manage their assets to optimize their revenue and minimize their tax liability.
Place REITs in Tax-Advantaged Accounts
A Real Estate Investment Trust (REIT) is a company that helps you invest in income-generating real estate. You’ll want to utilize tax-advantaged accounts for the income generated from these investments. Popular choices include the traditional and Roth IRA.
Need some help with that? Contact a certified financial planner in Utah, and get the best advice in the industry.
A financial planner can also help you with stock picks, trading, and other investment services.
Review Insurance Coverage
It’s always wise to take a yearly inventory of your insurance coverage. This spectrum includes health insurance and life insurance, as well as any additional insurance packages related to liability coverage for your business or even coverage for long-term care.
This last point may be essential for investors from the boomer generation. The latest report from the Urban Institute predicts that 70% of Americans over the age of 65 will need some form of long-term care.
Your investment strategy should consider these future needs to minimize any financial burdens on your family.
Get Expert Advice from a Certified Financial Planner in Utah
The market has destabilized in the last year, but this doesn’t have to be cause for alarm. On the contrary, when you partner with one of the best financial planners in Utah, you’ll have greater confidence in your ability to navigate this unusual period and emerge more robust and more stable than you ever imagined.
You can trust our expert care. We’ve served as a planner and financial advisor for entrepreneurs and investors alike and can help you strategize and preserve your wealth, no matter where your financial journey may lead.