FIXED RETURNS FOR RETIREES
Evan Beecham, owner of Beecham Financial Services Inc., a retirement planning firm, said he is steering retired clients concerned about the volatility in stock markets toward fixed-rate annuities, which are returning 5 percent, above the return offered by certificates of deposit or money-market funds.
CASH, EUROS AND MUNIS
Paul Dickey, president of INS Capital, a firm specializing in exchange-traded funds, said cash isn’t a bad place to hide out until the stock market stabilizes later this year. The iShares Lehman 1-3 Year Treasury Bond Fund, ticker SHY, is something he likes until the Federal Reserve begins to tighten rates. If the U.S. dollar starts to decline again, he likes the CurrencyShares Euro Trust, ticker FXE. He favors small-company stocks over large companies, municipal bonds over Treasuries and high- yield bonds for those able to stomach the risk.
RESISTING STAGFLATION
Louis Llanes, president of Blythe Lane Investment Management, has sought a portfolio that can resist stagflation (stagnant growth but rising inflation) by investing in foreign bonds and commodities. Individual investors can invest in foreign bonds through SPDR Lehman International Treasury Bond Fund, ticker BWX, and the PIMCO Developing Local Markets Fund, ticker PLMDX. He thinks commodities will continue to rise. The iPath Dow Jones-AIG Commodity Index, ticker DJP, offers a way to play the broader commodity market. He also recommends shares of oil and gas service companies.
MAINTAINING DIVIDENDS
Fred Taylor, principal with Northstar Investment Advisors, said the dividend yields that large companies are now paying are among the highest he has seen. The trick is to find companies that can continue to raise or maintain dividends even if the economy slows. Companies in the consumer staples, health care, telecom and utility sectors should be better able to do that. Taylor says meager returns on money-market funds will eventually force investors back into stocks, setting the stage for a sharp rally.
REAL ESTATE, ENERGY SECTOR
Al Woodward, chairman of Woodward Wealth Management, has placed clients into low-leverage commercial real estate investments, off-shore drilling ventures and Treasury Inflation-Protected securities. The Loomis Sayles Inflation Protected Securities I, ticker LSGSX, is one way to get those. He thinks the energy sector has more room to rise and recommends the Jennison Natural Resources Fund, ticker PGNAX.
Aldo Svaldi, The Denver Post
