Have we passed the worst of this drop in the markets.

Have we passed through the worst of the market doldrums?
Unfortunately no one knows for sure whether we hit bottom in November or if we are in a dead bear bounce rally. History shows us that you cannot time the exact bottom. What I will say is this. When the markets collapsed almost 40 percent the common investor took more of a beating than they needed to take. They had too much money at risk of market declines! There is an answer which can protect you from market risk and let you participate in market growth whenever that turnaround happens! That's what Safer Money Financial Advisors recommend. Everyone over age 35-45 should have some percentage of their assets allocated in this manner!

Markets that can drop 40 % in a matter of weeks are not safe places for the bulk of your financial assets. The recent 25 % upturn is a good thing but it does not guarantee you will not see another 25 % or greater downturn in the near future. Furthermore all of the bragging about the 25 % upturn ignores the fact that even if we add another 25% upside bump that you probably are still not even with where you were in September 2008. Do the math a 100 start point drop 40% leaves you with just 60 getting you back to 100 (your start point takes a 68% jump from the bottom.

Instead take some portion of your assets and allocate them so you are truly protected from both market risk and inflation risk. The result is that when the markets go south you do not loose and when the markets start going up you will realize some of but not all of the market gains. For most individuals this is a superior financial strategy for asset diversification and it is something we would be glad to help you implement with a portion of your fiscal assets.

These products may not be right for everyone. A suitability review will be conducted when we get to talk about your specific situation. However consider the alternatives. You are left to the whims of the market and its downturns or you use treasuries, or Bank CD's which protects principal but leaves you with inflation risk. Our alternative on the other hand beats bank CD rates, typically will beat inflation rates, and will give you the upside potential while protecting you from market risk.

Smart Retirement Options

There was an article in the Columbus Dispatch yesterday about managing your retirement assets. It was titled "Panic Is A Mistake In A Bear Market" The author is Mark Miller. He recommends sitting tight through a bear market. Although panic is not a good thing taking steps now rather than waiting may be a smarter strategy to implenment to insure your financial future. He identifies a problem made by many people with their retirement assets. He says that many people were overly aggressive in their asset allocation with some having 80% or more of their retirement assets invested in stocks. and not enough invested in financial products offering more safety. He shares some general wisdom when he says people should reduce their holdings in stock as they age and approach or enter retirement. He basically only talks about two alternatives Stocks and bonds. Stocks offer tremendous upside potential as well as awful downside risk, Bonds generally have less upside and may counteract modest market declines, Treasuries offer modest rates of returns and when they run out of money they go and print more, Banks offer miserly low rates of returns that may not beat inflation and offer no upside potential.

This is where I strongly disagree with his philosophy. He ignores Safer Money Alternatives. He does not say he dislikes them but he just does not even bother to mention them. Maybe he does not understand them and what they can do for any individual. I believe there is a logical place in every portfolio for Safer Money Alternatives. Young savers might start with 25-30% and increase the percentage as they age reaching 50% in their 50's, 60% or more in their 60's and as much as 70-80 % later. You need to always keep some liquid assets for future needs.

Safer Money Alternatives: How do they work and what do they do? They must offer protection of your principal. They need to provide some measure of income guarantee. They need to allow for upside potential to capitalize on improvements in the market conditions. You must have the possibility of growing your purchasing power after correcting for inflation. Some of these products pay you a bonus of 5% or 10% when you purchase them. All of the money you commit immediately goes to work earning interest and growing for you. Some of these products even allow you to create a Lifetime Income Stream that you cannot outlive. There are financial products that can do all of these things in the same product. If your current financial advisor has not told you about them are they really looking out for your best interests or retirement assets? Perhaps its time to talk to an advisor who will look out for your financial interests.

Back to the article. He asks what if you sell the stocks and invest in Bonds. You only have a 5% chance that your assets will last 30 years in retirement. That is the result of relative safety but low rates of returns. He Says if you keep the stocks in the portfolio only withdraw 4% or maybe less of your portfolio value per year your chance of having your assets last 30 years increase to 89%. Thats pretty good. Now look at the numbers if a portfolio is worth $100,000 you get $4,000 per year maybe for life and maybe not. Is there a better way? I think there is! I can help you sleep better at night and improve your cash flow in retirement, in the process. Lets take a 60 year old retiring at 61. Give me the same $100,000 to manage. At age 61 they can have an income stream of not $4,000 per year like the stock and bond balanced plan, but an increase in annual income of $1,200 dollars more, for a total of $5,200 per year for the rest of their life Guaranteed! Which sounds better to you? $4,000 per year maybe for life, or $5,200
per year for life! what if you retire at age 65? The great news is it only gets better with age!
Retiring at age 65 increases the annual income to $5,720 per year. Want more income give me more assets to manage or give me more time to grow your assets. For example at age 55 give me $100,000 to manage and retire at 65 you will have at least $200,000 in Income Account Value guaranteed and you will be able to take over $11,000 per year in income guaranteed for your life!!

Does This sound interesting?

How can we help you?

Contact us
polarisfinancialservices@gmail.com
or visit our website
www.columbusfinancialplanningpros.com

Struggling with Finances

An article this week in the Columbus dispatch make me think about all of the seniors out there struggling to pay the energy bill their gasoline bill their RX costs and even their food bills. On a fixed income this has got to be a very difficult year. Inflation in the Consumer Price Index is now 6%. The cost of fuel is up 100% in two years. Heating and air conditioning costs are expected to be up between 30 and 50 % this year alone.

What is a retired couple to do? Here are a list of things to consider beyond using less heat and air conditioning energy, considering more energy efficient appliances, using CFL light bulbs wherever possible, buy a more fuel efficient car and consolidate your trips. and shopping for bargains at the grocery store and buying generic medications if available and if you doctor believes it will be ok for you.Once you have considered these things lets look at the next steps.
1.Where is you emergency money kept? What interest rate are you currently earning? If less than about 3% you are making a mistake.
2.Next level are you parking some money in a bank CD? What interest rate are you earning? If you are making less than about 5% you could be making more!
3.Where have you positioned most of your retirement or long term assets? Have you every lost money where you are currently parking you growth assets? Do you have less assets there today than you did in 2006 or in 2007? Would you like to stop the bleeding in your financial assets or at least protect some portion of those assets from market risk? Would you be interested if you knew that you could earn a guaranteed 6-7.2% rate of growth in your income account value each year over a ten year period and still retain reasonable access to those funds with penalty free withdrawals meeting certain conditions? Would you like to be able to create a lifetime income stream with some portion of your total assets? If you have answered yes to one or more of these questions we should talk about a safer financial alternative strategy.
4. Do you need to significantly reduce your expenses and improve cash flow? Are you still making mortgage payments? Are you and your spouse if married both over age 62 years of age?

Are you willing to reallocate assets to improve your financial conditions? Would you like to arrange an initial no fee consultation to assess your current situation and determine if we could help you improve your financial health. How can we help you?

www.columbusfinancialplanningpros.com

polarisfinancialservices@gmail.com