Richard C. Young & Co., Ltd. is a Naples, FL and Newport, RI based financial advisory firm. We have been ranked by Barron’s as one of the top independent financial advisors in the nation for the last eight consecutive years. We manage portfolios for individuals, families, and small businesses throughout the United States.
For some time, we have been disillusioned with much of the mutual fund industry. Aggressive sales tactics, front-end sales loads, 12b-1 marketing fees, and high expense ratios practiced by many fund groups seem far from investor friendly. The sad reality is most mutual funds are not bought by investors, they are sold to investors. And the most popular funds are too often those that offer the greatest payout to brokers.
Few would accuse Sweden of being a free-market utopia. Not with a top marginal rate of 57% for personal income tax and government spending equal to 56% of GDP. However, during the last two decades, Sweden cut its public debt to 33% of GDP from a high of nearly 80%. Last year, Sweden eliminated its deficit. And for good measure, the Prime Minister, Fredrik Reinfeldt, recently announced his intention to cut the corporate tax rate from 26.3% to 22% (The U.S. corporate tax rate is 35%).
One lesson reaffirmed to us from the dot-com bust is this: Prudent investors do not rely solely on capital appreciation for stock market gains. During the latter part of the 1990s many investors overloaded on technology and growth-oriented shares. When the collapse hit, they were not only left with a decimated portfolio, but one that produced little annual income.
As a trustee for the City of Naples Firefighter Pension Fund, I am particularly interested in observing how government retirement benefits are disrupting state and municipal finances. Across the country, state and local governments have accumulated trillions of dollars in unfunded retirement promises. To fund these costs, expect taxes to rise, services to be reduced, or a combination of both.
What should stock market investors expect for the rest of the year? While we cannot predict the future, we continue to see a generally pleasing environment for stocks in 2012. Ultra-low interest rates on treasury bonds offer little competition for stocks, which have the powerful tailwind of election-year fiscal and monetary stimulus working in their favor.
NAPLES, FL
5150 Tamiami Trail North, Suite 400
Naples, FL 34103
Phone: (888) 456-5444 Fax: (239) 213-0770
NEWPORT, RI
98 William Street
Newport, RI 02840
Phone: (800) 843-7273 Fax: (401) 849-0002
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