sponsored by Midland National
With the markets hitting an all-time high the other week soaring over 21,000, many people have been asking this question, “when is the market going to decline?” While nobody has a crystal ball, it might be time to start thinking about where you could put your money if you are concerned that the markets are going to decline in the 2nd half of 2017. Here are four alternatives to consider for your money to consider if that happens.
- Cash – Remember, return of principal can sometimes be better than return on principal especially while the markets are spiraling on a downward trend. Even though your average savings account may pay .20% to .40%, you could leave your money in an FDIC insured account and then slowly dollar cost average your way back into the overall market. You could also consider using Certificates of Deposit (CD’s) as an alternative cash idea if you don’t want to leave the money in a money market account or in a savings account.
- Hard Assets – Some of you may remember back in 2008, when the markets were getting hit, some people did well in assets classes such as silver and gold. While most people think about a hard asset being real estate, there are other assets that you can physically buy, including gemstones like diamonds, collectibles (art, cars), and precious metals. All are possibilities to consider when the stock market goes south.
- Fixed Index Annuities – Even though the word annuity sometimes gets hit with a negative slant, you probably don’t hear contract holders complaining about the guaranteed retirement income they can provide. These kinds of products are offered by many insurance companies, and Midland National Life Insurance Company is a highly rated and well established life insurance company that you could check out when looking at these types of annuities. You may give up some of your upside in the products by having a cap on the upside growth of a particular index (i.e. the S&P 500 cap may be 5% in a particular year as an example), but you will have no loss of premium due to market downturns.
- Land – Will Rogers had a famous saying about land, “They ain’t making any more of it”. If you have the hold time, land can be an alternative opportunity when the stock market declines. You should look for land in areas where property values may have gone down or the population inflow exceeds the population outflow. Land requires having patience because it is a long-term investment, but one that could be a place holder in a sustained downturn in the equity markets.
These are absolute ‘musts’ to consider when picking life insurance. While not a necessity, it’s helpful to consider providers with informative resources and communities that openly discuss what’s best for families and individuals. Midland National maintains a strong, interactive network of customers. You can find Midland National on Twitter as well as Midland National’s page on LinkedIn. If you are on Facebook, you can connect with Midland National. Midland National Life Insurance Company, part of the Sammons Financial Group also provides a wide range of financial and life insurance related videos or you can follow along on the Midland National blog and keep up to date on all Midland National company updates that help customers learn more about financial products, financially-stable living, and gives transparency into its business.
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.
Fixed Index Annuities are not a direct investment in the stock market. They are long term insurance products with guarantees backed by the issuing company. They provide the potential for interest to be credited based in part on the performance of specific indices, without the risk of loss of premium due to market downturns or fluctuation. Although Fixed Index Annuities guarantee no loss of premium due to market downturns, deductions from your Accumulation Value for additional optional benefit riders could under certain scenarios exceed interest credited to the Accumulation Value, which would result in loss of premium. They may not be appropriate for everyone. “Income”or “lifetime income” refers to guaranteed payment of Lifetime Payment Amounts (“LPAs”). It does not refer to interest credited to the contract. Advise clients to consult with their own tax advisor regarding tax treatment of LPAs, which will vary according to individual circumstances.
