BUY LOW - SELL HIGH!
The typical thought of most is to “Buy Low and Sell High!”
With this thought in mind…”WHEN IS THE RIGHT TIME TO SELL HIGH?”
Back in 1999, we saw people have some of the biggest Bull Market Gains totals in history….over the past 10 or so years. Why did some capture these gains and some didn’t?
GREED! People who were satisfied with what they had “WON” pulled out when the market started to drop in 2000. People who let GREED take over, saw that they had made some substantial gains in the market over the last 5, 10, or so years, wanted more!
The unfortunate people who lost, many of which were in retirement and couldn’t afford the losses, had to make lifestyle changes. They needed to keep pulling money out of these accounts to make ends meet, ended up spending principle. When the markets started back up again a couple years later, these people had less money to go back up and are WAY below where they can afford to be.
Many of these retirees had their brokers keep telling them….”Stick it out…the market will go back up!” Well the brokers (and history) were right, but for many, they lost. They ended up pulling out when the market was down …Buy Low, sell Lower.
With the introduction of Guranteed Fixed Indexed Annuities (GFIA), retirees now have the ability to participate respectable gains when the markets go up, and still have their principle protected from market losses. In fact, each year on the anniversary date, these GFIA’s lock in any gains you may receive…and that new amount can’t go down from market losses either!
Let’s look at a scenario: Joe purchases a GFIA for $100,000. The account goes up 7% over the next year. The new account value on the 1st anniversary date is $107,000. This new amount can never go down if the market goes down. Let’s assume the market goes down 10% the 2nd year. The $107,000 doesn’t get any gains and stays at $107,000 (instead of losing 10% or $10,700). When the market starts back up, so does Joe’s account from the $107,000 point, not the lower amount like money in the stock market can do!!!
This is so powerful, that Billions of dollars each year are flowing into these Safe, Savings and Retifement programs. I’ve seen gains over the years from “0″, (when the markets went down in 2000, to double digit returns…without risking principle and annual gains!
WHEN DO YOU SELL HIGH? When your account values are high! (Like possibly Now!). If you feel the market may drop again (which they will…not if, but when)…you may be a good candidate for looking at a Guaranteed Fixed Indexed Annuity. The taxes on interest is deferred until you spend it….(unlike taxable CD’s and Brokerage Accounts, when you pay taxes on the gains each year even if you don’t spend it). This allows you to get control over when you want to pay the taxes!!! GFIA’s also avoid probate, so you may be able to pass more on to your loved ones quicker!
That’s all for now, if you have any questions, please email us at info@IntegrityEstateAdvisors.com