Expert: Diversify portfolio for the long-term.
Fresh off Wall Street's longest winning streak in 17 years, investors still remain cautious 2013 is the year our economy finally gets back on track.
“If you look at the inflation adjusted market, we're no where near a new high,” Houston financial planner Michael Parmet tells KTRH News. “We'd have to get to 15,600 on the stock market to get to our true new high.”
Parmet does see growth in the stock market because of a rising world population and technological advancements worldwide. He also expects stocks to outperform bonds over the next five years, but only because interest rates are so low.
“The feds are on the verge of causing deflation because they are artificially holding it down, that makes stocks look so attractive,” he says.
However, Parmet warns several short-term factors could derail the market before year's end.
“We've been seeing the sequester, we continue to have housing outside of Texas be a major issue,” he says. “Employment is a big issue, unskilled employment is still unacceptably high nationwide and people all around the country cannot find skilled employment.”
Parmet says it pays to diversify your portfolio for the long-term as we await how the government handles the sequester and high unemployment.
