Wealth Management: Guarding Wealth, Grabbing Opportunity
Low interest rates have propelled gains for bonds and stocks, but the pending withdrawal of monetary stimulus by the Federal Reserve could restrain or reverse these gains in 2014.
Investors may turn increasingly to alternative investments to hedge their risks in the equity and fixed-income markets. Some affluent South Floridians are diversifying their risks by parking money in investment vehicles with historic returns uncorrelated to those of stocks and bonds, including private equity, emerging market funds and energy-related limited partnerships.
Maintaining exposure to multiple asset classes may prove more challenging for investors in 2014 if popular alternatives such as emerging market funds perform poorly, as they did this year. But correctly predicting next year's performance based on this year's results is hard to do, and portfolio diversification mitigates the risk of such uncertainty. Much of the doubt surrounding wealth transfers and estate planning has faded this year.
Enactment of the American Taxpayer Relief Act in January solidified the ground rules for the federal estate tax. Perhaps the biggest change on the wealth-transfer front this year was the Supreme Court decision in June in support of same-sex marriage.
The Internal Revenue Service subsequently extended all tax benefits available to heterosexual couples to same-sex spouses, including valuable options related to estate planning.
Here are the views of seven South Florida investment and tax experts on what may lie ahead in the areas of federal monetary policy, growth possibilities, fixed income plays and asset preservation.