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

SAN DIEGO, CA, September 24, 2010 /24-7PressRelease/ -- 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."

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