If you said “buy low, sell high,” you’d be correct. One major problem that often plagues our human condition is unrelenting optimism; even when the markets are at record-breaking highs, we continue to believe they’ll go even higher.
This is where most investors fail, by not taking advantage of the growth their assets have realized. Global markets are currently flirting with breaking all-time highs, and with that, smart and savvy investors know to lock-in at least some of their gains before it’s too late.
One of the main tools we use for these accounts at Olympic Golden Retirements is an annuity. Fixed annuities give clients a guaranteed rate of return for a certain period, (usually 3-5 years). Indexed annuities forgo the guaranteed rate for a shot at higher growth potential by following a market index. The funds inside the index annuity are never directly invested in stocks, bonds, or mutual funds and therefore have no potential for loss, even if the market should fall. Just like having a 401(k), a TSP, or an IRA, these annuities are tax-deferred, but without any of the same risk to principal. Every year or so, the gains from the index are tallied and added to the previous year’s balance, “locking” them in against future loss.
If you’d like to capture the growth your risk-based accounts have achieved while allowing future growth without loss or fees, contact us to request a complimentary review and together we can assess whether an annuity is a good fit for your portfolio.