The stock market has been strong, and many of us are sitting on the gains. That is good news! But maybe it is time to review your portfolio? Especially now, when the stock market is turbulent…AGAIN.
When markets rise, your portfolio can become more aggressive than you intended. Rebalancing may help you protect some gains, reduce unnecessary risk, and make sure your investments still match your retirement goals and risk tolerance. Just like in a casino, when people are on a winning streak, they take the chips off the table and hide them in their pockets.
For people near or in retirement, the question is not only, “How much can I grow my money?” The question could be, “How much of my money is immune to the market volatility?”
What are the investments that are immune to the stock market volatility? Many people resort to CDs and money markets. These vehicles are safe, but their growth is limited, it is barely there. Often, interest paid by CDs and money markets does not keep up with inflation. Bonds don’t protect you from market volatility effectively, as bonds can lose value.
That is where certain annuities may be worth reviewing. There are many different types of annuities out there. They serve different purposes.
A fixed indexed annuity may allow a portion of your money to earn interest linked to a market index, while still protecting the principal from direct market losses. It is not designed to capture every market gain, but it may help create a more balanced approach after a strong run in stocks. The key is finding the right type of annuity. For growth, that usually means looking for accumulation-focused indexed annuities with no fees (or very low fees), strong participation rates, reasonable caps, shorter surrender periods, and a financially strong insurance company.
When structured properly, an annuity may help provide protected income, reduce market exposure, and create more stability in retirement. Annuities are not right for everyone. It is important to understand the fees, surrender charges, guarantees, and liquidity limits before making any decision.
At Serenity Wealth Management, we help you review your options and decide what actually fits your retirement plan. If you feel nervous about your portfolio and are wondering whether it is time to take some chips off the table, let’s talk! Schedule an appointment here. Or give us a call at (310) 467-2277!