Creating Sanity from Chaos
Taking a holistic view from 25000 feet up on our lives is the mantra to follow if you want to remain in a sane state throughout your retirement and pre-retirement years. We mustn't worry about outside influences that don't affect our reality in these matters. Like watching CNBC everyday and seeing all of the buzz in the markets, whether up or down in the long haul it probably won't affect us.
One way to protect our nest egg from direct market exposure would be to use methods of investment that pay us no matter what the market does, even if it is a lower return it can be better in the long run. We often forget that not losing money when the markets drop can be a considerable help when we are in the mode of drawing down on the portfolio. I often show clients the math of average returns that will prove that just because an investment boasts a 25% average return the net result could be zero gain. It is often an eye opening experience for the client.
A vehicle that is regaining popularity is permanent life insurance. It provides consistent positive returns into your account while protecting your family from unforeseen circumstances. You can borrow from yourself instead of from the bank and add to your own wealth. This concept has been around for many years and used by the wealthy to provide a guarantee in order to transfer wealth to future generations while being able to access the money for lifetime use. Because of the gained popularity insurance providers have introduced new products which enhance the returns by taking advantage of a limited upside of the market while still protecting them from the downside.
In our office we use these vehicles on a regular basis with clients who aren't interested in market exposure yet need inflation protection and the ability to borrow from their own nest egg. If you want to learn more contact me at 610-695-8748 or email me at roy@yourwealthadvocate.com.
Alternative Market Options
Some of my clients who wish to utilize the market but want some downside protection have asked me to research the market for a money manager who has this philosophy. Well I am proud to say that I have found exactly such a manager. This company researches the market globally 24 hours a day 7 days a week and from this research receives a signal for each of the asset types and sectors and will either invest or go to cash in each segment. This process is quite complex for them however the client can rest assured that they are out of the market during downward trends and back in when the markets are rising. It is not a perfect process however it has a higher success rate that the "buy and hold" strategy that is often used by money managers.
If you are interested in protecting your portfolio we can develop a special customized process for you. Please call me or email me if you want more information or schedule a meeting.
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