How to Protect Against Stock Market Loss
We have all heard stories from our parents or grandparents about forgoing bank accounts and sticking money under the mattress during the economic nightmare that was the Great Depression.
Now, many people are facing another nightmare as retirement savings account values have plummeted over the past few years. To avoid the uncertainty of the markets, many investors are opting to park their money into short-term savings vehicles like treasuries, money-market funds or CDs––today’s equivalent of “under the mattress.” A whopping $42 billion was deposited into money-market funds in November 2011!
Unfortunately, the barebones truth is that money invested in traditionally safe securities just doesn’t earn a lot today, which doesn’t bode well for those of us saving for retirement. With U.S. Treasury notes and money-market funds paying next to nothing and five-year certificates of deposits yielding a measly 2-percent, parking your long-term retirement money in short-term savings vehicles is almost the same as sticking the money under your mattress.
So, what’s an investor to do when you’re looking to earn some money on your principal…without risking your nest egg? Fixed Index Annuities may be an answer.
Fixed Index Annuities allow you to participate in stock market index gains …but not the losses. Every year that your portfolio registers a gain that gain will ‘lock in’ and become protected from future market conditions. What this means is this: if your Fixed Index Annuity earns you $1,000 during a year, you can’t lose that $1,000…regardless of how the stock market performs in the future. This can provide a nice growth component for your retirement portfolio.
Purchasing a Fixed Index Annuity certainly isn’t the ‘fast lane’ of investing. However, by offering principal protection for your hard-earned savings, they can go a long way in putting to bed your fears about losing money in the market. They may be a good solution for investors seeking an opportunity to participate in growth based on the performance of the financial markets.
Contact us today via our contact form or at 866-904-4700 if you’d like more information about getting your money out from under the mattress! For over thirty years I have helped empower thousands of individual investors––just like you–– to take control of their money and attain long term financial security.
Another easy way to see if your retirement income strategy measures up is to sign up for our free video series, “Securing Your Retirement Future,” which helps educate you on how fixed index annuities work…and how you can use them to GROW AND PROTECT your retirement assets.
Annuity product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.
Cathy DeWitt Dunn of DeWitt & Dunn, LLC, is the driving force behind Annuity Watch USA. With decades of experience in the financial services industry, Cathy has dedicated her practice to educating clients on how to take maximum advantage of financial solutions that are not available in traditional brokerage houses. Cathy is proud to be on the forefront of innovative financial solutions for the individual investor.
This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.