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Prosper On: 2012 Wrap Up

Rather than provide the standard yearly wrap up, I thought it would be best to address the two most frequent questions I’ve been receiving. First, what was surprising about 2012? Second, what’s the outlook for 2013? Let’s begin with 2012.

To many, the financial markets delivered a surprise in 2012 with the Standard and Poor’s up 15% YTD according to Google Finance. Who would have thought that the headwinds we faced last year of prolonged elevated unemployment, sluggish economic growth, and all the political turmoil would have led to that much market growth?

Leave it to the American private sector, the entrepreneurs and corporations who innovate and challenge themselves to generate additional revenues and earnings during a very difficult time.

The bond market was a surprise as well. Interest rates continue to be surprisingly low now and for the foreseeable future. Many anticipated a gradual increase interest rates but the Federal Reserve continues to use their tools to keep interest rates low. Inflation was anticipated to increase; yet it remains tame.

Then there’s politics. We experienced a drawn out election and campaign process that finally came to a close in November. The decision was clear – even with all the struggles of the past four years there will be no change in leadership for the next four.

Let’s move on to 2013. Despite the looming indecision of the fiscal cliff there are a few things of which we are certain:

  • We know forecasting can make one look foolish, especially when predicting events about the future.
  • We know a well thought-out financial plan allows investors to see through the ups and downs that inevitably come our way.
  • We know entrepreneurs and business innovators strive daily to solve problems, create value for clients, customers and consumers. If there’s a problem they work hard to figure it out.
  • We know great companies (like those that grow and pay dividends) are great businesses that focus on doing better every day. I think businesses like these will always be great investments.
  • We know rising income overcomes many financial problems, such as inflation.
  • We know all this uncertainty can lead to a lot of stress.

We care about our clients and we know all this uncertainty can lead to a lot of stress. So give us a call or come by if you’d like to discuss your finances or future with your advisor here at Prosperion, we’d be happy to help.

Thank you for being a client of our firm and have a blessed and successful 2013.

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Blind Spots: The Mental Mistakes Investors Make and Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post. He was recently named a Barron's Top Financial Advisor and recognized as a Forbes Top Wealth Advisor in Colorado.

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The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. All performance reference is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

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