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There are investments that beat inflation, and a down market.

High #inflation got your #invesments down? If you are near retirement you know this pain well. Even now, some younger investors (who have known nothing but an up-trending market their whole lives 📈 )are starting to realize its not all fun and games.

 

BUY THE FAANG STOCKS AND HODL shouts the millennial! 🎢

MY BOND FUND WAS SUPPOSED TO PROTECT ME shouts the almost-retiree! 🤯

 

There is a way to beat inflation and a schizophrenic market.

 

At its most recent meeting the Fed signaled it expects inflation to persist. In my view the American investor wants the pain of the inflation bubble over so bad it has self medicated with that most powerful of drugs.

 

Hope.

 

After pumping 2-3 trillion into the economy I am surprised that anyone is surprised that inflation will persist. With inflation “only” up 3-4% year over year, people have also forgotten that is +3% over the already +20% from previous years.

 

So really, the self talk of “the market always comes back” should be rephrased “I hope the market always comes back.” Will it? Over a long enough period of time…sure.

 

The question isn’t if the market will come back. The question is, especially for those nearing and in #retirement, how long? Moreover, how does making those retirement plans or distributions feel with a down market also pulling money from that account rather quickly (and ceaselessly).

 

How mcuh confidence do you have that you won’t have to spend less, trade off that trip to see your daughter’s soccer game, or put off that trip with your grand kids to Disney Land (right when they’re the best age for that)?

 

For wealth accumulators and HENRYs (high earners not rich yet) and the investing public generally, how much farther away is that vacation, vacation house, or being able to reduce your hours to spend time with your family?

 

As I tell all my clients “hope is not a #financialplan.” I have stared at an investment account and hoped as hard as anyone has hoped before, and it didn’t turn the market green.

 

So what do we do? All good #financialplans do two things (okay, three things).

 

1️⃣ Grow your #investments when the sun shines 📈

2️⃣ Protect your #investments when it starts to rain 📉

3️⃣ Give you peace of mind that no matter what happens, you’ll be ok.

 

Ironically, its the #inflation and market volatility that actually makes this possible.

 

There are investments that actually get much better when #inflation is up and the markets are a roller coaster (doesn’t matter, up or down, its the volatility that makes them better.)

 

Investments that most off the shelf DIY investors, typical 401ks, and standard Wall St investment firms don’t use (or don’t have access to) have much better terms during these times.

 

This is because those investments use options as a hedge against a down market and a leverage tool with a good market.

 

For instance, I just had a client and we needed to create #passiveincome.

 

I was able to structure an investment that had the following.

 

1️⃣Doesn’t lose a penny unless the S&P500 is down over 40% at the end of 5 years (very little chance of this.)

2️⃣Pays him 8.45% interest on his money.

 

I have another set or clients within 2 years of #retirement.  I put them in an investment that

 

1️⃣Is guaranteed never to lose.

2️⃣Can make up to 10% if the market is good.

 

 

My favorite thing to do in my practice is the unexpected.  Most clients at some point utter “I bet you are like everyone else.”  To be honest, I used to have imposter’s syndrome and quietly agreed with them.

 

By using investments that remove unnecessary risk without giving up the reward it is in times like these that these strategies have really paid off, and I have the happiest clients in the world.