top of page


The cable channels and internet can be addictive and, even if your exposure to the markets is limited, you tend to pay attention. But don’t be panicked into an emotional decision. Pundits pointing at green or red arrows with raised voices should not influence your decisions. Only you know what’s best for you. If you feel comfortable where you are, in terms of risk and fees, hang in there. If your gut is telling you to reduce or eliminate your risk for a while, pay attention. If you are not sleeping well at night, there are alternatives to market risk. These alternatives allow you to continue to participate in future market gains, while avoiding future market downturns. They are called Fixed Indexed Annuities.

Are you going to retire in 30 years, send your kids to college over the next 10 years, downsize in the next 5 years or retire in the next year or two? Whatever your time horizon is, your investment horizon should correspond accordingly. If your investment horizon is 15-25 years before you want to retire, you can typically afford to take more risks in the market. This is because you have time to potentially overcome market declines in the near future.

On the other hand, if your retirement is approaching in the next 5 years or so, it may be a good time to take advantage of the remarkable run the market has had and cash in. You can never fault yourself for cashing in at or near all-time market highs. Remember, the worst time in your “investment horizon” to lose money is right before, right at or soon after retirement, because these losses can be extremely difficult, if not impossible, to recoup.

To preserve and protect your gains, and yet continue to see growth for future income (or long-term care needs), a Fixed Indexed Annuity could be an ideal alternative.

The answer, of course, is “Yes”. The market will do both. It always has, and it always will. But no one – not forecasters, pundits, financial gurus, money managers or you – can predict when these movements will occur. Occasionally, someone gets it right. But, more often than not, it was just a lucky guess. Remember the old truism, “I’d rather be lucky than good.” So, maybe you should just sell everything now since the market is so volatile and uncertain. Then, wait until the market inevitably drops and jump back in. Or... maybe not. A number of studies warn against this. In fact, one study points out that missing out on just 10 of the best days out of 160,000 daily returns can cause a loss of 50% in potential returns.1 So, what to do? You could stay linked to the market, but remove the downside market risk with a Fixed Indexed Annuity. It is hard to argue with participating in a percentage of all future market gains, eliminating market losses and fees, sheltering the gains from taxes and gaining enhanced long-term care benefits.

1 Source: Lieber, Ron. “Your Money.” The New York Times 7 Feb. 2018: B1 and B5. Print.

Stockbrokers in general, and money managers in particular, love to talk about “paper losses” when the market declines. “Don’t worry, don’t panic,” they will often tell you. “Over time, the market will make these paper losses back.” What these advisors often do not warn you about, however, are “paper gains.” They rarely tell you to look at your statements that reflect market gains with some skepticism, for those wonderful numbers, unless cashed in, are simply “paper gains” and can disappear in a hurry. In short, they are not part of your net worth until you make them so by converting these ephemeral market gains into real money. Once some or all of your gains have been realized, you might want to consider transferring this new addition to your net worth into a Fixed Indexed Annuity, where your net worth can be guaranteed to continue to grow.

Or, are you unable to sleep well at night due to anxiety-prone fears about the market? This is not a character flaw. It is entirely normal. But, it may have consequences. Such fears may cause you to work harder or delay your retirement goals. It also may create a sense of uncertainty, which in time creates indecisiveness. So, you do nothing which, of course, is a decision. If you have many decades of investing ahead of you, staying fully invested in the market remains a viable choice. If, however, the markets really are causing you sleepless nights, consider converting at least some of your risky and fee-laden assets into a safer and less costly Fixed Indexed Annuity. The same advice, with a good deal more urgency, goes out to those of you who are approaching or are already in retirement. You definitely do not need sleepless nights to go along with your other health and financial concerns.

Keeping some of your assets in the market may be the best solution for your specific scenario. The ideal portfolio for most investors is comprised of investments that complement each other during competing and opposing cycles. Most annuities will always provide protection against market and taxation risk, and market investments will typically be a better guard against inflation. Thus, some combination of both can be the best way to control and lower all risk.

If you have assets that you want to keep in the market, consider utilizing the money management services we now offer. As a Certified Financial Planner™, Maddie can work with you, one-on-one, to acclimate you and your portfolio to the amount of risk you should accept in order to meet your long-term goals.

bottom of page