Making money: What the experts say

Your portfolio on Nov. 7

Investors should resist any temptation to alter their portfolios because of the outcome of the presidential election, said Jason Zweig in The Wall Street Journal. What moves the financial market is monetary policy, “not which party passes through the White House gates.” Federal Reserve interest rates cuts are like “rocket fuel for stock returns.” Since 1965, large stocks have returned an annual average of nearly 12 percentage points more when the Federal Reserve was cutting rates than when it was raising them. By comparison, the difference in stock returns under Democratic versus Republican presidents over the same period was less than 7 percentage points. “There’s no systematic relationship between the party of the president and asset returns,” said Creighton University finance professor Robert Johnson. So on Nov. 7, investors should remember: “Fed policies matter more than party politics.”

Insurance sector’s woes hit wallets

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Low interest rates mean hard times for the insurance industry and higher prices for their customers, said Linda Stern in Reuters .com. People looking to buy annuities for retirement income should know that they’re “near a market bottom, in terms of yield.” They should buy some annuities now and some in a few years, when yields are likely to improve. Many insurers that jumped into the long-term-care insurance market are now aggressively raising premiums because they “didn’t really understand just how pervasive and expensive such care was going to be.” If you need such coverage, seek a company with “a sizable long-term-care business and a top rating” and make sure you can afford a premium rise of up to 50 percent.

Sock away more for retirement

You can save more in your retirement plan next year, said Blake Ellis in CNNMoney .com. The IRS has raised the tax-free contribution for 401(k)s to $17,500 for 2013, up $500 from this year. The maximum contribution to an IRA has also been increased by $500, to $5,500. It’s the second year in a row that the IRS has raised limits as a result of rising inflation. The agency also increased more than two dozen tax benefits. Taxpayers will be able to make tax-free gifts of up to $14,000 each in 2013, up from $13,000 this year, and if you are a U.S. citizen living abroad, you can exclude $97,600 from your taxable income, up from $95,100.