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LLOYD: Despite government, economy, good investments still available

During the past few weeks, the hot topic around the water cooler, which used to center on who's going to win "American Idol" or the latest hot stock pick, has been replaced by opinions on health care reform. This once dead bill resurrected itself -- like something out of "Nightmare on Elm Street" -- and has elicited extremely strong opinions in the process.

Recently, I had the opportunity to report for Gwinnett County jury duty the day after the vote in the House. There were about 1,200 potential jurors waiting to see if we would be called to serve on a case. While waiting, I heard an animated discussion in the back of the room that was incredibly telling about the times we live in.

At first, I thought it was an argument, but in reality, it was a group of concerned citizens -- who appeared to have never met before -- discussing the controversial House vote. One gentleman said that after the vote took place late in the night, he proceeded upstairs to his children's bedrooms, kissed them as they slept and apologized for the massive debt they will inherit.

To say the least, these folks were angry and freely expressing their views. I'm certain scenes like this have been happening all over our country, which leads us to the greater debate of what this all means for the future -- and our money.

I have the privilege of serving as a regular contributor on Fox Business Network, and one of the most often asked questions, not only from the anchors based in New York City, but also by the listeners of my local radio show -- "Focus on your Retirement" -- is this: With runaway government spending, larger deficits, projected higher taxes and 9.7 percent unemployment nationally, how can the stock market be safe?

Before I answer that pressing question, there are some things that must be understood about investing in the market first, regardless of these external factors. Think about these points when determining the steps in your financial path.

* Investing in the market should be a long-term proposition. When analyzing a portfolio, particularly in light of these uncertain times and government actions, it is imperative to look at many factors and ask yourself some tough questions. How risky are the holdings? How many different asset classes are invested? When will we need to start withdrawing money on a regular basis? How much risk can be tolerated?

* Diversification. Many think they are truly diversified, but in reality, they are not. One question that needs to be asked is, "How many unique individual holdings are in my portfolio?" What I recommend on average is that a portfolio should consist of more than 12,000 unique holdings, 21 distinct asset classes and more than 40 countries. This is critical in curbing risk while trying to capture growth.

* The stock market can still potentially rise -- even if the direction of the country appears to be more socialistic. First, I believe in capitalism and the free markets. I believe this is what has made our country the best in the world. In my personal opinion, we are going in a wrong direction with some of the legislation presently passing through Congress. Bigger government is not better. However, the market is unpredictable.

With that said, a statistic that was brought to my attention is fascinating. If you look at the European markets during the past 40 years, the United Kingdom has beaten the S & P 500 an average of more than 1 percent annually. And Denmark, which is considered less capitalistic than the United States, has averaged more than 3 percent more than the S & P. Here in the U.S., the S & P 500 rose more than 30 percent in 2009 and has risen 5 percent so far this year. What that shows is free markets and capitalism can still win over socialistic policies.

Now to answer the initial question given our current government and economic landscape, how will the new health care reform legislation and more governmental socialistic policies affect the stock market?

My thought on this is it will make investing more challenging. Some market sectors may benefit from the changes, other sectors may feel the squeeze of government regulation. I believe that it's imperative for investors to seek professional advice in times like these. Individuals should only invest if they are prepared to invest for the long term and are disciplined. The good news for those who can't sleep at night while investing in the market is hope is not lost.

It is important to research and acquaint yourself with the many conservative products in today's marketplace and follow strategies designed to allow the nervous investor priceless peace of mind. The best -- and most timeless piece of advice -- is take your time, ask questions and become a more educated investor when determining the strategies that are right for you today.

Mark Lloyd is the founder of The Lloyd Group Inc., which serves the distinctive financial needs of those nearing retirement and those already retired. He hosts a weekly radio show called "Focus On Retirement" that can be heard in Gainesville on 103.7-FM WXKT at 9:30 a.m. Saturdays and 7:30 a.m. Sundays. His Web site is www.thelloydgroupinc.com.