These are Interesting Times…

by Miriam Bridgeman

Are you staying awake at night wondering about your investments in the market? Are you thinking about how will I retire and meet my goals if this market doesn’t cooperate or if inflation continues to be at record levels? There’s got to be a better way to balance my portfolio and sleep better.

If you work with a planner, they should have been cheering the market over the past decade but should always be preaching diversification. The problem is we have been in such an up market we forget the downturns. It’s not that it’s a bad thing because everything is on sale, but when we don’t know when we will come out of the downturn, we tend to stay awake at night wondering if we will have to work an extra year or two to make up the difference. Downturns in the market do create opportunities.

Diversification is the act of choosing multiple options to reduce overall risk by investing in different assets to react differently to each event towards one solid goal or focus. Obviously, the goals and focus are to achieve growth. Some win and some lose, but as a whole, you are moving in an upward trajectory. Stocks are good, mutual funds are good, bonds are good, real estate is good, and one overlooked asset class is cash value life insurance is good. Each has its place and purpose that react differently to each up or down in the market trends. Life insurance that is whole life and owned by mutual insurance companies creates cash values within the policy that can sustain market downturns and provide stability to your portfolio while not being tied to the investment markets, emotional turmoil, or President’s remarks. Not all whole life insurance is the same. You must find a company that is mutually owned and pays its policyholders or you in the form of dividends when there are profits in the company. The strength and stability of an insurance company or annual dividend percentage can be found online or through your insurance agent.

Whole life insurance can give you the security of a death benefit should the worst happen but also can be an asset with tax-free growth regardless of market performance. It is a powerful tool that creates a self-insured pension plan, cash for a down payment on a real estate purchase, a college savings account that is not counted toward FAFSA (college loans), protection for a business is a key person situation as well as a carved out key person future pension and a banking loan option like no other. Did I mention that the growth of the policy and the death benefit is tax-free? If you knew nothing about the markets, finances, economy, or others, and I asked you if you thought taxes would go up, down, or stay the same in your lifetime, you most certainly would answer go up. Everything tends to go up regardless of the fight to reduce debt, work harder, or rules.

Your planner should have a focus on the markets but also be thinking about protection planning and diversification in the least. A good planner will have multiple options to balance your portfolio in the up markets and the downturns. If this is not the case, then be prepared to get a second opinion.

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