Financial planners quell the fear of risk
Michael Masiello, president of Masiello Retirement Solutions in Rochester, N.Y., has observed that "Those who were overleveraged the most (in 2008) got hurt the most."
"Those were the people spending way above their means and carrying loads of debt," he says.
In his current financial planning practice, Masiello spends more time trying to help clients find a balance between wise financial habits and a healthy amount of risk. "Many people haven't noticed the dramatic increase in the stock markets from 2008 to 2013," Masiello says. "We have had a great run, but people pay more attention to the media sound bites than the true trends."
Jim Wright, chief investment officer at Harvest Financial Partners in Paoli, Pa., says he is more focused these days on buying high-quality, dividend-paying stocks for his clients. "We have always felt that dividend-paying stocks represent an attractive part of the equity markets and, over longer periods of time, outperform the market as a whole," Wright says. "Given low rates, dividend income is even more attractive today."
For those clients on fixed incomes, Wright works to ladder corporate bonds over five to seven years. With a bond ladder, "You typically get a more attractive yield than (certificates of deposit), and you get some liquidity, should you need money early," he says.