How To Create Income In Volatile Markets Ep. 93

Many of us are left hoping for the best this year when it comes to the market. The Nasdaq is down nearly 18% this year and the S&P 500 is down close to 12%. When I’m talking with people, I normally ask how they are feeling about the market. The overall sentiment I get is, “we’re hoping for the best.”

If when I went to the foul line when I was playing basketball and I had known I was going to make the basket, I would have loved it. That known outcome would have been a relief, and I could have had greater confidence in my ability to win at basketball. 

Many of us are left hoping for the best this year when it comes to the market. The Nasdaq is down nearly 18% this year and the S&P 500 is down close to 12%. When I’m talking with people, I normally ask how they are feeling about the market. The overall sentiment I get is, “we’re hoping for the best.”  If when I went to the foul line when I was playing basketball and I had known I was going to make the basket, I would have loved it. That known outcome would have been a relief, and I could have had greater confidence in my ability to win at basketball  When it comes to investing, we normally don’t have known outcomes, but there are some types of insurance vehicles that do have these known elements. People tend to gravitate to safety in times like these when the economy is volatile.

We want balance in our approach and to not use one type of product at the exclusion of others. With that said, when we are within five years of using a segment of our money, we believe the bucket of money we are using for income should remain somewhat consistent.  We would be better off taking income from a bucket of money that we know will be in place for us. Right now, there are three places we can put money to do this.  We can use the bank, but our money isn’t productive. We can use bonds, but we don’t want to do that when interest rates are going up like they are this year. When interest rates go up bond values go down. So, where’s the best place? We use fixed annuities for our income bucket. With a fixed annuity your money is going to be there no matter what which may bring peace of mind in markets like we are having this year.  I’d be happy to answer any questions you may have on what I’ve covered here. You can reach us at 864.641.7955.  

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