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Ameriprise Financial Advisors’ Geri Pell on how the potential fiscal cliff impacts investors’ strategies.
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We are -- -- trading day away from falling off.
-- can't avoid saying at the fiscal -- -- we gonna say in the next hour forty minutes of -- the question is how should you be preparing your portfolio.
-- joining us now in a Fox Business exclusive as Jerry -- Ameriprise Financial advisor who by the way.
Let me get my finger and -- that is one of the top female financial advisors according to Barron's -- congratulations on -- -- -- -- so obviously we need to pay attention to what -- saying you say by the welteke you know it's deter the fiscal -- has nothing to do with the value of the market.
So how should investors play this such -- -- environment.
Relative to it turns out that it's looking at the fiscal cliffhanger doesn't it as we get up for the last minute.
So I think that investors tend to get caught up emotionally too much room and so there a couple of things that you can do as we get towards the end of the -- one is if you haven't taken capital gains.
Which will almost certainly go from fifteen to twenty maybe 203 point 8%.
Do it on Monday if you have a gain in a position take it may be right back right away hit -- capital gains tax at a lower rate.
That's one of the things you to do -- also make sure that next year you increased your 401K.
To.
171000.
To 235 if you can catch the extra over fifty announced OK sure that you look at taking the -- for a one K plan because of what will become more valuable as tax rates go up very -- -- Roth conversions go back and look at putting money into 529 plans to get anything that's going to be -- We'll hurt more so anything you can do as a consumer and of course Munis will become more valuable next year as well very good advice now you also say don't sell in a down market.
The -- cash to work aren't you worried about catching that falling knife.
You know not actually had a look at what this -- been like you know S&P 500 is up about 15% we've been through the European crisis -- -- for the election everybody's been.
Wait wait wait hold and wait hold wait meanwhile the markets contracts and forward so.
Corporations have cash they have money.
The S and the PE ratios about thirteen and a half percent at their -- and a half times this plenty of opportunity in the market.
And I think that if you -- -- that down market you just trying to time and we don't know what's gonna happen in when.
So long term holding asset allocation diversification.
And if you -- cats on the sidelines in your brave.
This would be a great time to be investing.
Argued that -- no doubt look at we -- over the cliff.
We cut the debt half right absolutely that's the best that it could happen well it could be better but it's a good thing.
But aren't you concerned about what it would do the to the economy.
I don't think that we're going to be going through as much hand wringing and this much of the recession I think that it could be a short term cyclical recession -- we -- over a cliff.
I don't think that we're going to go over a long -- And I think I mean that's the really big worry -- short -- -- it'll happen toward you know a couple of weeks or month or so.
But I really think that you don't want to sell into the down its only gonna be recession if we linger.
And I don't think that that's -- really -- possibility there's so much public sentiment about not wanting to linger and hopefully Washington will be listening to that.
And remember that we've been here before we get a tax rates like this in the ninety's before.
And also there are a lot of studies out there that show the people do not stop investing just because capital gains rates go higher so we focusing too much on the negative -- I think the focusing wait too much on the negative we have to focus on some of the positive things like that Europe didn't pull over a cliff.
-- interest rates are reasonable in Spain and Italy and grits at a time to do it.
Yes they -- take corporate earnings.
Little signs of weakness in the loss for the learning seasonally concerned about up.
-- I think that it's cyclical and I think it's been little signs I think we have to get on him with get employment together in the United States housing is starting to come back -- -- slowly slowly but in the northeast in particular.
There's more demand.
And there's less housing inventory.
But in the rest of the country we have to wait and see on that employment is really really the key thing and so what comes out of all of this negotiations and how we employ people.
Infrastructure and all of that can really make it different.
Well since you know companies are not doing anything -- hunkering down -- got a lot of cash they could use for -- not gonna do anything until Washington gets its act together.
Which means that technology for example could be a big sector because of companies get some signals from Washington and then go out and invest into hiring people putting technology online.
It could be great but we just waiting and waiting and waiting which is Michael that the -- -- that Clinton I am ready.
I'm so tired of the same fiscal cliff apple -- thank thank you very much of that -- -- A matter of prize financial advisor thank you so -- -- -- you're welcome that's what she wouldn't be.
Fund run and I'm very optimistic as Algeria the closing bell close.
