Although CPA practitioners may have some high-net-worth clients like those described in the articles, most of us work with clients with far more average investor profiles. Since these clients don’t fit the eligibility requirements for many “alternative investments,” what options are they left with? I encounter many individuals who were hammered in the market in the past two years but don’t have a clue what their response should be. Many still cling to the buy-and-hold approach that was widely hailed by Wall Street as the only successful way to invest.
For those without much market savvy, my recommendation to clients is that cash is king and debt loads will be a death trap. For those with a slightly more aggressive stance, I suggest balancing that position with bear-market mutual funds.
As for timing models—and they do work—there is a time to be in the market and a time to be out—all the way out. I could see the handwriting on the wall two years ago when my co-workers were “swinging from the chandeliers” and proclaiming how wealthy their heirs would be from a few stock positions. Unfortunately, my proclamations that the bull market would end fell on deaf ears. I wonder what the accepted strategy will be at the bottom of the bear market.
Dale Schwartzenhauer, CPA
Jim Johnson & Co.
Walla Walla, Washington
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