It all hinges on how Congress and President Obama will come to terms with the nation?s debt ceiling, curtailing federal spending and raising more tax revenue.
Until such time, according to Edward F. Fowler Jr., retirement-portfolio advisors like himself will remain adrift in a sea of uncertainty.
?We?re all faced with the same dilemma. Do we maintain a fixed position or change direction?? Fowler said.
That prevailing sense of ambiguity, he says, ?is keeping everybody in a lurch right now; that?s the conundrum.?
Fowler, a registered financial consultant and independent broker-dealer agent with SagePoint Financial Inc., said there will continue to be a ?wait and hold? pattern in his industry ? until lawmakers agree on a definitive strategy for reining in spending and generating more tax revenue.
?We?re not being specific right now,? Fowler said, ?because we don?t know,? what lies in store.
His ?real concern? is the likelihood of ?a significant tax increase in certain investments.?
?Everything?s on the table, everybody is hanging on,? Fowler said, adding: ?They?re going to use creative ways not tried before to raise more tax revenue.?
That conceivably could include higher dividend tax rates and perhaps, Fowler said, even a tax on municipal bonds.
In the meantime, Fowler says the average investor in a pension or 401(k) plan should abide by the ?common thread? maxim of diversification.
?Keep a steady course,? he said.
Fowler says some clients are anxious about speculation the president?s Affordable Care Act eventually might permit taxation of health care premiums, treating them essentially as ordinary income.
?There?s an apprehension the government is going to go after big ticket items to drive down the deficit,? he said.
The Dow Jones Industrial Average, he said, will likely continue trading in the 13,000 range ?until Washington puts a plan in place.?
?The stock market doesn?t like uncertainty,? he said.
Fowler, 57, says he?s been affiliated with the Phoenix-based SagePoint Financial since 1995.
He runs his main office out of his East Taunton home and employs a staff of four; another two employees, Fowler said, work at his Canton satellite office.
He puts his personal client list at 375 and says both offices service a total of 3,000 clients.
Fowler urges investors of all stripes to ?be cognizant of media reports coming out of Washington, D.C.?
?It will drive the tax tail on the dog.?
Contact Charles Winokoor at cwinokoor@tauntongazette.com.
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Source: http://www.tauntongazette.com/news/x1146190454/Debt-ceiling-uncertainty-hampers-investment-advice
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