Conservative Investment Options
The Yield Curve Inversion- oh my. The escalating trade war- what? An upcoming recession – “we have got to find a place for our money.” These are the conversations I have witnessed over and over. In the long run, conservative investment options are hard to find. Back in the day a retiree was able take their pension, social security, and then invest their 401K in a bank CD earning 8 -10 percent. Today the banks are not so generous. Bonds were also an option because interest rates were consistently falling. Today, the Federal Reserve Bank is considering more reduction in the interest rate but we know in the long term interest rates cannot stay this low.
This whiteboard video opens discussions on two conservative investment options – fixed indexed annuities and structured investments.
I know what you are thinking- oh brother- another fixed indexed annuity sales pitch.
With interest rates so low for such a long time, some of the products may be worth a look for the conservative portion of your portfolio.
We would love to help you navigate the crazy markets and explore what investment options fit your needs. Contact us today or call (720)504-0820.
Any opinions are those of Gary Keyfauver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.
A fixed annuity is a long-term, tax-deferred insurance contract designed for retirement. It allows you to create a fixed stream of income through a process called annuitization and also provides a fixed rate of return based on the terms of the contract. Fixed annuities have limitations. If you decide to take your money out early, you may face fees called surrender charges. Plus, if you're not yet 59½, you may also have to pay an additional 10% tax penalty on top of ordinary income taxes. You should also know that a fixed annuity contains guarantees and protections that are subject to the issuing insurance company's ability to pay for them.
Structured investments are not suitable for all investors. They involve a variety of risks, and each investment will have its own unique set of risks and considerations. Before investing in any structured investment, an investor should review all applicable offering documents for a comprehensive discussion of the risks associated with the investment. Market-linked notes are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value.
