[IMGCAP(1)]In the wake of Monday's huge market sell-off, Accounting Today financial planning columnist John Napolitano offers his thoughts on investor strategies.
Corporate America took its tough medicine in the past two years, and is now strong, with low debt and high cash balances.
For long-term-growth investors, staying invested is not uncommon as investment decisions are made on long-term fundamental issues and not short term emotional issues. Some of the tactical managers that I follow are still invested and have not gone to cash or other defensive positions as of today.
Some equity positions as of Monday, August 8, have dividend yields in excess of the 10-year Treasury yield. For those seeking income from their holdings, compare dividend yields to fixed-income options. Look at companies who have had a history of consistency and growth in their dividend policies.
Now it is time for our government to take its tough medicine, and stabilize both the process of governing and America’s financial house. Investors cannot win in the long term if intuition and second guessing of government and economic policy influence otherwise sound decisions.
John P. Napolitano, CFP, CPA, PFS, is chairman and CEO of U.S. Wealth Management in Braintree, Mass.