Financial New Year: 1st News Saturday

FORT WAYNE, Ind. (WANE) - What should we expect for 2012 when it comes to our finances?

How big will Europe play a role in the world's economy in 2012?  Will the 2012 presidential election affect the economy at all?  Should we expect the same roller coaster between Democrats and Republicans when it comes to our national debt?  A financial advisor from Hefty Wealth helps answer some of those questions.

• Expect more of the same: Economic uncertainty will continue as a result of the debt crisis in Europe. Also, 2012 is an election year, so we expect politicians from both parties to dig in their heels and stay indecisive.
• The situation in Europe – regardless of how it plays out, which no one really knows at this point – will have a ripple effect on economies around the world, including here in the US.
• Though 2012 is a big election year here in the United States, it’s also a big election year worldwide. Major economic influencers such as Russia, France and China will be holding their presidential elections, and it’s important to not get too hung up on the domestic election. The global economy is interconnected and will be affected not only by the United States election, but by the happenings in other countries.

• US debt will remain a problem: The U.S.’s debt and deficit profile continues to worry us, especially because there has been no headway to cut the deficit. Investors are asking how serious an issue this may become and who will bear the costs.
• Should these issues not be addressed, unemployment will remain high longer than necessary.
• The US government will have a difficult time reinvesting money into our economy because of an unattractive cost structure.
• There will be less spending by individuals because of a reduction in personal income.

• The market will continue to fluctuate wildly: 2012 will be marked by exciting rallies followed by unnerving declines. Therefore, we recommend investors be realistic about the economy and the markets. To do so, we advocate a proactive advance and protect investment strategy to navigate the volatile market next year.
• Volatility can be an opportunity if you employ the right investment strategy in the New Year.
• The markets are very fragile right now, and it won’t take much for them to rally in 2012. The markets and investors have been beat up so much, so even a small bit of good news can turn them positive. An advance and protect strategy will allow you to take advantage of those rallies.
• Don’t make investment decisions entirely based on “what ifs.” Significant economic events that affect your portfolio can and will happen in 2012, but others won’t. While we’re confident in our 2012 outlook, no one has a crystal ball, so make sure you stay educated and up-to-date about current events, economic issues and market trends.