It’s been a phenomenal run since 2009 if you’ve had money in
your 401k or brokerage accounts tracking the overall stock market. That is unless you’ve been sleeping for the past
month while global stock markets have been falling fast to start the year.
Could you have prevented this market loss in your
portfolio? Chances are you could have if
you did a couple of things. For
starters, I usually recommend turning off the news and skipping the newspaper, unless
you’re just reading the local news or sports section. Everything else is usually political or
economic drivel slanted towards one viewpoint or the other and in this writer’s
opinion should be considered only for entertainment value. If you’re internet savvy, there are better “alternative”
sources of information where you can get a more informed read on what’s going
on in the world.
Beyond becoming better informed about the state of the
economy than what the mainstream press and government statistics can tell you
(next to nothing truth be told, unless you actually believe the unemployment
rate is really 4.9% as reported, and the housing market will continue to rise
indefinitely… it won’t).
Point #1: You can and probably should look beyond mainstream
news outlets for what’s really going on the economy. You know the saying: “insanity is doing the
same and expecting different results”.
The media is there to pacify you and a strong federal government most
likely isn’t interested in having a well-informed populace. There would be too many questions to answer. Think about it. Sadly, you’re financial advisor likely watches
the daily news and reads Kiplinger’s or Money Magazine for the next great investments
so good luck getting a different opinion there.
Here’s another popular saying and one of my personal
favorites because I come across it quite a bit: “Can’t see the forest for
the trees”. This applies to you if your
portfolio is all stocks and bonds/mutual funds.
For example, your 401k or 403b.
It’s difficult to impossible to prevent market losses if your money is
tied solely to the ups and downs of the market.
Even bond portfolios lose money!
Point #2: The only way to avoid market losses is to be… wait
for it… completely out of the market.
This means you need to own assets outside of the Wall Street
paradigm.
That may seem like a difficult task because frankly there
are limited options to invest beyond the conventional financial products and
solutions usually touted as the best way to accumulate a nest egg by all the
big talking heads and Wall Street financial firms.
Fortunately, however, alternative strategies do exist and
they are becoming more popular than ever largely because they provide a few
things the traditional Wall Street portfolio lack: safety of principal and guaranteed lifetime
income.
For a truly diversified portfolio, I would encourage you to
think about working with financial institutions that have a vested interest in
your future. Remember Wall Street is
just one way to accumulate wealth. It
can be a very good to you when the market is rising. After all, a rising tide lifts all
boats.
But I think it’s safe to say the tide is headed out and
there’s no point in being the one who is caught swimming naked.
If you haven’t sat down with an advisor who specializes in
strategies that can protect your assets, it’s time to consider looking at life
insurance related solutions.
Anthony Robbins recently published Money: Master The Game
and in his book he interviewed the world’s greatest investors. It’s an incredibly powerful and insightful
book. I encourage everyone to pick up a
copy to learn everything Mr. Robbins learned during his research but here are two
of the ground breaking conclusions Mr. Robbins shared in his best-selling book
that I’d like to share with you:
- “Private Placement Life Insurance” is a must have for every portfolio. For those unfamiliar with Private Placement Life Insurance, this strategy is more commonly called the Infinite Banking Concept ® or Bank On Yourself ®. Speak to an advisor certified to offer these solutions.
- To paraphrase one of the highly accomplished investors Mr. Robbins interviewed: “The only outcome that matters is INCOME”, and in this particular chapter Mr. Robbins writes about how to create your very own private pension by utilizing Indexed Annuities.
There you have it from one of the most influential and
highly networked individuals alive. If
you only have a Wall Street portfolio, you should speak to an advisor who can
help you see the entire financial landscape, including life insurance related
solutions, so you start protecting your assets from loss and taxes while also
building a future guaranteed income stream you can’t outlive.
Anything less that and you know the saying: “Can’t see the
forest for the trees!”
John Montoya co-authored The Secret To Lifestyle Financial Security in 2013 with best-selling author Pamela Yellen. To contact John, please visit www.vcita.com/v/john.montoya