I had an investment and retirement planning review with my advisor the other day. We have been working together for many years. Years ago I gave up my Series 7 and RIA status as I focus on safe money instruments and needed the full time pro to handle my investments. So, as I often say… I am NOT giving investment advice. I am just passing on some thoughts I have as a result of my meeting.
Okay, yes… many of us just love what we have and the way that our equities have performed. But, if history repeats itself, we are going to hit some speed bumps. There will be a market pullback at some times. My advisor, and many others, also look at history and are confident that the market will come back. They always have. It just depends on how long that will take. In my case, as we rebalance, we will take advantage of the pull back and get more aggressive on the equity side. Now, I have a good portion in my “safe money accounts.” Let’s look at some facts:
Markets decline every 18-24 months. In the event of a bear market, equities decline by about 32%. My advisor is predicting a speedbump that will be short lived with declines of 15-25%. I am not going to into an economics class, but we have had a very “friendly” Federal Reserve. They continue to pump money in the economy and are keeping rates very low. But, inflation, rapid increases in interest rates and a recession could change things quickly. I am not suggesting that any of things will happen. But, we all remember (at least us older guys and girls) the song by Blood Sweat and Tears, “What goes up, must come down.” We just don’t know when or how severe.
I am not writing this to be used with the public for the sale of products. I am just giving a little history and providing you with info from my investment advisor. But, as he said, we must continue to rebalance on a daily basis making sure that we do have enough money in our “Safe Money Buckets.”
I think it is a great time to have discussions with our clients and prospects to see if they would get an ulcer in the event of a significant downturn. Communication in a caring way is the path to a great relationship. People are looking for conversations and options. We sure do have them.
Also, I am reminded of an ad that is on TV and in various papers saying that ”If you have $500,000 or more to invest, give us a call.” The nice thing about what we do, we can also be of service to the majority of Americans that do not have an extra $500K sitting around.
Okay, yes… many of us just love what we have and the way that our equities have performed. But, if history repeats itself, we are going to hit some speed bumps. There will be a market pullback at some times. My advisor, and many others, also look at history and are confident that the market will come back. They always have. It just depends on how long that will take. In my case, as we rebalance, we will take advantage of the pull back and get more aggressive on the equity side. Now, I have a good portion in my “safe money accounts.” Let’s look at some facts:
Markets decline every 18-24 months. In the event of a bear market, equities decline by about 32%. My advisor is predicting a speedbump that will be short lived with declines of 15-25%. I am not going to into an economics class, but we have had a very “friendly” Federal Reserve. They continue to pump money in the economy and are keeping rates very low. But, inflation, rapid increases in interest rates and a recession could change things quickly. I am not suggesting that any of things will happen. But, we all remember (at least us older guys and girls) the song by Blood Sweat and Tears, “What goes up, must come down.” We just don’t know when or how severe.
I am not writing this to be used with the public for the sale of products. I am just giving a little history and providing you with info from my investment advisor. But, as he said, we must continue to rebalance on a daily basis making sure that we do have enough money in our “Safe Money Buckets.”
I think it is a great time to have discussions with our clients and prospects to see if they would get an ulcer in the event of a significant downturn. Communication in a caring way is the path to a great relationship. People are looking for conversations and options. We sure do have them.
Also, I am reminded of an ad that is on TV and in various papers saying that ”If you have $500,000 or more to invest, give us a call.” The nice thing about what we do, we can also be of service to the majority of Americans that do not have an extra $500K sitting around.
 | Until next time… good selling! Raymond J. Ohlson, CLU, CRC, LACP President and CEO The Ohlson Group 1-877-844-0900 |
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