Issue 12.11
The past 10 years the stock market has been as volatile as anytime in history. This has had a huge impact on many seniors’ retirement accounts that are invested in stock market related investments like mutual funds. This has caused many seniors to look for alternative investments to Wall Street that offer more safety and certainty.
As the founder of the largest investor education company in the country, Investools, I had the opportunity to teach hundreds of thousands of individual investors how to invest on their own. Most seniors have been taught to use the traditional approach to investing where they diversify their investments across a wide range of stocks or mutual funds in hopes of riding out any dips in the market. Unfortunately, when the market dips, nearly all stocks and mutual funds go down.
Even the best-diversified plans have still lost money over the past 10 years as the market has lost half its value twice only to recover. The ride has been wild, but there has been 10 years of zero growth.
As I looked back over the past 10 years, or the Decade of Nothing as I like to call it, there have been only a couple things that actually made money. First, you could have employed bearish investment strategies that make money when the stock market falls. Since the market tends to fall faster than it rises, these strategies have done very well over the past decade.
The other type of investment that has done very well is Life Insurance. Now I know many of you have been taught that Life Insurance is a poor investment, but I would simply ask you, “poor compared to what?” Compared to losing half you money twice in the past decade I think it looks pretty good.
The type of insurance I’m talking about is permanent insurance, like whole life or universal life. These insurance policies have “cash value” which builds up over the life of the policy. These policies also have contractually guaranteed rates of returns so your cash value will always rise. That’s a comfort to know that you’re not going to lose money on your policy and that the return is guaranteed by the insurance company.
Since Insurance companies are strictly regulated by the government, they have to have huge reserves behind every policy they write, unlike a bank or brokerage firm that is highly leveraged. So a life insurance policy is one of the safest places to put your money with an above-average rate of return. Add to that the death benefit that is part of every life insurance policy and many people are now seeing a safe alternative to having their nest egg exposed to the risk of Wall Street.
You can learn more about this Wall Street Alternative strategy as well as dozens of other tips on investing and personal finance in my new book, “The 60-Day Money Miracle”. You can download a free copy today at rossjardine.com