Steve Economopoulos for The Patriot-News

Is it time to take your money off the sidelines?

Are you an “ investor” or are you a “ saver”? If the thought of having your money at the mercy of the volatile stock and bond markets makes you cringe or keeps you up at night, you are most likely the latter.

However, if you believe in the value of making quality investments with your hard- earned money and believe that over time it might benefit you or your family, then you might be an investor and wondering, “ Is this the time to buy?”

Greed or fear?

Buy now? This can be a bewildering question for many people.

It is important to keep in mind that the short-term direction of the market is governed by greed and fear. Worries about Europe, government policy and the potential for a “double- dip” recession have kept fear prevalent, as evidenced by large daily swings in mar­ket values.

Although fear has been winning the battle lately, greed will come back into play, and people will not want to miss being invest­ed when this occurs.

Greed can return for any number of reasons. For example, some improving economic news coupled with the potential for a few unexpected positive an­nouncements could cause a turnaround. Moreover, the manufacturing and service sectors have continued to expand, recent holiday sales were strong and consumer confidence has improved.

These indicators might be just what’s needed to motivate investors to put large amounts of sidelined cash back into the market.

Faith can be detrimental

Hope is a feeling that something will eventually happen just because you believe it will, and faith is a belief in something even after common sense has told you not to believe in it. While these feelings are prevalent around the holi­days and can lead to great personal accomplishments, they are usually detrimen­tal when it comes to invest­ing. Buying an investment that goes bad and hoping that it will recover gener­ally does not work.

With many heartwarm­ing stories of faith and hope that make us feel good around the holiday season, keep in mind that having these emotions involved in your invest­ment decisions can lead to frustration and a lack of success. If this describes you, consider teaming with the services of a personal portfolio manager.

During today’s uncertain times, a good portfolio manager can be invalu­able in helping you capture opportunities from asset classes that you might not consider investing in on your own.

Volatility is high

This headline has been a favorite in recent news, but what does it mean to the in­vestor? Indecision regarding the direction of the mar­kets, economy and political picture is more prevalent now than at any time inmy investment career. In the late 1990s, it was hard to find a client who did not expect returns in excess of 15 per­cent. Now 5 percent would be satisfactory to these same people.

When expectations are low and fear and volatility are high, it often indicates a good long-term buying opportunity. As you might have heard, some believe it’s good to get greedy when others are fearful.

If you agree, start putting your investment wish list together and determine when and how you will get your portfolio invested.

Why buy today?

Companies have report­ed record earnings while consumers have increased their savings over the last few years. Consumer spending represents about 70 percent of our economy, according to J. P. Morgan’s “4Q Guide to the Markets.” With retail sales improv­ing and potential further growth in sales from pent­up consumer demand, we might be seeing early signs of more strength to come.

This type of environ­ment once again lends itself to a potential time to buy investments that match your goals. With tax time soon upon us, it is also a great time to review your holdings and how they should be weighted based on your risk as an investor.

Consider taking a stand in 2012. Ask yourself what asset amount you can com­mit to certain sectors that might represent a good investment over the next 12 months.

If you can accept fluc­tuations on the part of your capital, this might be your time to create a diversi­fiedmix and build a solid portfolio designed tomeet your goals while potentially maximizing the return you receive on your investments. And as an investor, I believe you will look back on this time and be glad you did.

Steve Economopoulos, CFP, ChFC, Managing Principal, PIM Port­folio Manager in Harrisburg at 717-545-5870. The accuracy and completeness of this article are not guaranteed. The opinions expressed are those of the author and are not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. Investment products and services are offered through Wells Fargo Advisors Financial Network LLC, and Member SIPC. Econ Wealth Management is a separate entity from WFAFN. Investments in securities and insurance products are not FDIC- insured and not bank guaranteed and might lose value.

Article source: http://blog.pennlive.com/business/2012/01/wealth_matters.html