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SCC Financial Planners See Inflation On Horizon

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By LAURA CONE

The Sun

Published: January 14, 2009

Ronald Ward, a certified financial planner with Ward Financial Services, said with the volatile financial markets he keeps an open door policy at his Sun City Center office.

For the past 20 years, he has witnessed the unpredictable twists and turns of the economy. He predicts 2009 will bring much of the same.

"It's going to be a very trying year to find out if the plans the government are going to implement are actually going to work," Ward said. "If it works, it's going to give us the possibility to pull out of the situation we are in. If it does not work, I don't know what the conclusion will be."

One outcome Ward and other financial planners predict is inflation. Ward said he expects inflation to become a problem in 2010 with full-blown inflation and increased interest rates becoming a strong possibility in 2011.

When it comes to their finances, he advises many of his senior citizen clients to think about good fixed accounts such as municipal bonds and corporate bonds.

"I think people better be patient," he said. "I'm not super optimistic about it. If you have the capital to invest and you don't need it for five or six years, there are good buys. If you don't have money to wait that long, I'd stay patient."

He advises senior citizens who don't have as much time to wait for the stock market to recover, to stay away from housing and bank stocks.

Gary Cotter, the owner of Cotter Financial and a certified financial planner, said he hopes to see the stock market turn around in 2009. At the same time, he also anticipates inflation.

"What's on the minds of my clients is how much money have I lost and am I going to live long enough to make it back?" Cotter said. "I think we are going to reach a turning point sometime in 2009 barring some really bad unforeseen event."

Cotter compared the current bear market to the bear market in 2001.

"We were pretty much at the bottom of the market as we came to the summer of 2001 and we probably would have seen the recovery if it were not for the 911 attacks," he said. "That derailed the recovery."

Cotter said he expects inflation in coming years due to the government bail-outs. His advice to combat inflation is to invest in the stock market.

"Unfortunately it's the opposite of people's instincts which is to come out of investments and into guaranteed things like CDs right now," he said. "When we begin to have rapid increase in prices, it's not going to provide any protection at all. To keep pace or beat inflation, investments in good companies is the answer."

He steers his clients after asking them to decide what percentage of stocks is appropriate for them. Older people typically opt to hold a smaller percentage in stocks, he said.

For more information on Cotter Financial, call (813) 634-2000. For more information on Ward Financial Services, call (813) 633-7322.

Editor Laura Cone may be reached at lcone@mediageneral.com.

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