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When the Federal Reserve raises interest rates to slow economic growth and keep inflation at bay, Wall Street gets jittery. But for individual investors keeping close tabs on their portfolios, patience may translate into solid returns. That’s the thinking of experts like Kyle Farmer, a financial services professional at insurance giant New York Life in Columbia, Maryland. “Whether it’s high oil prices or high interest rates, you want to stay the course.”
Even as interest rates and energy prices continue to rise, Farmer maintains that investment decisions shouldn’t focus on the frenzied highs and lows of market indicators or signs of inflation. And trying to time the market is a losing proposition. “Even experts have difficulties timing the market,” he says. “You don’t want to jump just because everyone else is.”
Experts maintain that in today’s environment the best money moves require discipline and commitment. Using a team of financial experts, plot an investment strategy based on short- and long-term financial goals and risk-tolerance level and stick to it. But, your investment portfolio is only one part of the equation. As you fine-tune your finances midyear, you should pay attention to those vehicles that will not only provide solid returns but protect income streams as well. By all means, stay focused. “People shouldn’t act on emotion,” says Farmer. “You have to be in it for the long haul.”
Investing With Focus
Curtis K. Robert, a credit repair and debt elimination specialist, has been following Farmer’s advice through his investment activities with Team Works Worldwide Investment Group, a Silver Spring, Maryland-based investment club focused on real estate. Since joining TWIG two years ago, Robert has watched the outfit grow to 150 members.
At the beginning of the year, TWIG targeted condo conversions throughout Washington, D.C.; Atlanta; and Florida as an investment. Since the group has more than $15 million in assets, it has been somewhat indifferent to the Federal Reserve’s recent interest rate hikes. “When you have a [large] group of people, you have more buying power,” he says.
Instead of changing its investment philosophy, TWIG stuck to its guns, teaching its members how to use proven methods to invest in good opportunities. “A lot of people say they want to be rich, but that can be fleeting,” says Robert. “We want to teach people how to build wealth with passive income on a long-term basis.”
Building Blocks To Wealth
Fred Wilson, regional vice president at financial services firm Primerica in Randallstown, Maryland, agrees. He makes his clients chart financial goals in five-year blocks, having them assess debt, income protection, and investments. He maintains that although corporate America has most investors fixed on high interest rates, he’s more concerned about debt overload. “The biggest mistake people make is not getting rid of debt,” Wilson says. “We like to encourage people to get on a debt snowball, where you pay off one debt and then jump on to the next debt and pay that off too.”
As the year reaches its midpoint, Wilson says it is a good time to