Safe Money Investing in a Turbulent Stock Market
There are a few things you need to know to make sure you are investing your money safely. The first thing is the stock market is not a very safe place to put all your eggs in one basket. You really need to diversify your portfolio in order to make sure you are keeping speed with inflation.
Have you heard of institutions or advisors that invest your money and they have control of your finances like Bernie Madoff or The Stanford Financial Group. Many people just opened accounts and let these kind of financial organizations invest all of their money. The problem is that whether these guys made money or lost money they nevertheless were paid high commissions on your money. They also had complete control of your money so these institutions or individuals ran illegal Ponzi schemes using your money and as long as they continued to get new money from investors it seemed like they were investing your money the right way. They guaranteed rates of return of 10% and higher.
The problem I have with not having control of your own finances is that you never know whats going on with your money. The investors became creditors of these institutions and many never recouped the money they invested.
As an investment advisor, I always make sure that my clients can log in and manage their own money and check to see how their investments are performing.
The stock market is very unpredictable and is taking large declines, as of this writing, and my focus is to not have any losses when you invest your money and to be as tax efficient as possible. I have invested millions of dollars and I make sure that losses are not part of my philosophy. You nevertheless need to invest in a 401k plan if it is offered at your work but diversify your investments in your 401k plan and make sure to allocate some in the money market sector to limit exposure.
I utilize annuities and insurance as a way to invest large sums of money and nevertheless get great returns ranging from 7% and up with no risk of losing any principal already in a down market. If you invest strictly in a fixed annuity you will not keep speed with inflation. If you invest in a variable annuity you will be unprotected to stock market risk which could have large losses. I am an expert in indexed annuities and I have sold millions of dollars of them and they keep growing because of the safety of principal and also having the ability to keep speed with inflation and the tax deferral of the gains is important.
When you invest large amounts in indexed annuities you also have low management fees unlike variable annuities, which like the stock market needs a person to manage the funds which adds to the fees. Indexed products are compared to a benchmark, such as the S&P 500 or other index and consequently lower fees to function. The buy of an indexed annuity comes with serious compliance to make sure this kind of investment is right for you. First, I need to make sure that since your money is locked in for a certain period that this is investment is right for the investor. The company will also make sure this investment is right for the purchaser and then the investor has a free look period to make sure the investment fits. Most of the time an annuity is not right for a person who is in the late 70’s or 80’s but compliance will determine this depending on the situation. If a client is closer to 80 years old we then look at indexed life insurance policies to see if we can solve a problem for them. I do a good job of due diligence to make sure my clients fit the product that solves their money issues.