2011 Recap and 2012 Look Ahead

For equity investors, this past year was a time when fear and worry swayed the decision making process more so than anything else. Instead of relying on the data showing what was actually happening, stock markets around the world traded based on the ‘what could’ happen scenarios they feared. Here are some examples of the worries investors had in 2011 vs. the reality of what is currently happening as we head into 2012:

Worry #1: Recession fears threaten U.S. companies
Reality: Through the 3rd quarter, corporate profits are now at all-time quarterly highs with corporations having more cash on their balance sheets than ever before.

Worry #2: Job growth stalls as companies delay hiring
Reality: Job creation has been rising; unemployment claims are at lowest levels since
April 2008 and unemployment rates are falling

Worry #3: U.S. debt crisis threatens business cycle
Reality: U.S. economy has continued to grow despite the lingering debt crisis

Worry #4: Consumers are tapped out and stop spending
Reality: Retail sales continue to increase year-over-year at a faster pace than historical average. Household balance sheets continue to improve and debt to income ratio is near lowest levels in 50 years

These are just some examples of how the fear of what could happen has thus far not come to fruition. This divergence from fear vs. reality made for a difficult investing environment throughout 2011 as stock market volatility ran high.

However, as we enter 2012, there are still questions to be answered…

Question #1: Will Europe finally get their issues under control?

In our opinion, the problems over in Europe are the biggest thing holding the U.S. stock markets back at this point in time. The necessary tools are available in the Euro Zone to contain their debt issues—the big question is whether all 17 Euro Zone countries can come to decisions that everyone will agree to. U.S. corporations have known about the problems in Europe since 2010 and have been planning their business models to mitigate recession environments throughout Europe (that is one reason why corporate profits have continued to grow despite Europe). Europe’s problems aren’t going away anytime soon but as long as it doesn’t get worse, its impact on our markets should diminish over time.

Question #2: Will our economy continue to grow?

Most of the double-dip recession talk in early fall has been squashed at this point in time from the solid economic numbers we had in the third and fourth quarter.  The employment picture continues to improve, albeit slow. Corporations, for the most part, are in good financial condition and are already prepared for a low growth environment. Consumers have lowered their household debts levels and are in better financial shape. It seems as the most likely scenario is for our economy to continue to grow at a slow, moderate pace that we have seen for the past couple of years.

Of course, there are many other issues out there to be answered: Who will win the Presidential election in November? How will we tackle our own debt problems? Will inflation be a big impact in the next year? How will the housing market be in 2012? Will stock markets start trading back more on fundamentals vs. fear?

No matter how these questions are answered in the next year, one thing is for sure, we will continue to try our best to stay on top of the ever changing investment environment to help you achieve your financial goals. We are committed to staying educated on the investment and tax planning strategies to maximize the opportunities available. We look forward to the planning we will do together in 2012!

2012 Retirement Plan Contribution Limits

As we enter the new calendar year, it is important to know what the IRS allowed contribution limits are in 2012 for the most common types of retirement accounts.  Understanding these limits can help you better plan and prepare for the year ahead when it comes to saving for your long-term financial goals. From 2009-2011, the IRS kept annual contribution limits the same for IRAs, Roth IRAs, 401Ks and Simple IRA plans. For the 2012 calendar year, there is only a slight increase, and that increase only applies for 401K contributions. Below is a summary of maximum allowed contribution limits for the more common type of retirement savings plans for 2012:

401K, 403B and 457 Plans

  1. $17,000 is maximum employee deferral for anyone under the age of 50 (this in an increase of $500 from 2011 limits)
  2. $22,500 is the maximum employee deferral for anyone age 50 or over (this is an increase of $500 from 2011 limits)

IRA and Roth IRA

  1. $5,000 is the maximum contribution per individual for anyone under the age of 50
  2. $6,000 is the maximum contribution per individual for anyone age 50 or older

Simple IRA Plans

  1. $11,500 is the maximum employee deferral for anyone under the age of 50
  2. $14,000 is the maximum employee deferral for anyone age 50 or older

From all of us at WealthCare Partners, we hope you had a Merry Christmas and a Happy New Year!
We look forward to continue growing our relationships with you in 2012 and hope your year
gets off to a great start!


Did you know?

Recessions – The U.S. has survived 13 recessions during the past 75 years, an average of 1 every 5.8 years (source: National Bureau of Economic Research)

You Start on Monday – There were 3.35 million job openings nationwide at the end of September 2011, an increase of 225,000 job openings from just 1 month earlier (source: Department of Labor)

Stay Positive and Believe in Yourself!

“Today, in the town of David, a Savior has been born to you: he is Christ the Lord” Luke 2:11

“Failure is only the opportunity to begin again more intelligently” Henry Ford


Don’t Keep Us a Secret!

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Disney Vacation Home Rental

We have arranged a special benefit for “clients only” who wish to vacation in the Disney area. You can rent a 4 bedroom home 8 miles from the Disney entrance for a substantially discounted rate of $500/week + taxes. This is a fully furnished home with private pool, full kitchen, living room, master suite, 2 full baths, and washer/dryer. The house must be rented for at least a full week and is available on a first come/first serve basis. This discounted rate is the minimum to cover costs and is available only to clients at this special rate.

Disclaimer: © 2011 WealthCare Partners – Securities are offered through Cadaret, Grant & Co., Inc. Member FINRA/SIPC. WealthCare Partners and Cadaret, Grant & Co., Inc. are separate entities. WealthCare representatives are licensed in the States of Indiana, Florida, North Carolina, South Carolina, Texas, Washington, California, Oregon, Michigan, Illinois, Ohio, Mississippi, and New York.