Annuities are Calculated Decisions – Stocks Get You in a Hurry
What a wild couple of weeks we’ve had in the stock market! The tariff push by our president sure shook things up around the world and no matter whether you’re for or against, it is definitely altering financial plans for a lot of reasons. Just like any other major news event, novices became experts in economics and there’s no shortage of opinions on either side of the argument. Most of them are complete BS. Regardless of where you sit on the issue, you have to admit that these are nothing more than good lessons that need to happen from time to time.
All of you remember the pain from the tech bubble in 2001 and the financial crisis in 2008. Those were market events that took years to recover. 2010 was the tail end of what has been called the lost decade because the S&P 500 was lower at the end than the beginning. A lot of people seem to easily forget how damaging the losses were and how much time it took to come back. What makes this harder is the fact that an overwhelming majority of investment professionals have been in this business for less than ten years. These exuberant coaches never had to navigate a truly difficult investment environment. Be careful whose advice you follow and consider their perspective along with everything else.
I believe both sides of a portfolio are important and I have good friends and contacts who are professional traders and managers. Some are having a tough time right now managing expectations for people who took a hit in the past few weeks. I noticed it when talking to one of them recently and realized that it’s not only in volatile times that people seem to be in such a hurry when dealing with the stock market. Trading in and out, jumping on the latest trend, or bailing altogether when it gets rough. The guys I know seem to always be up against a deadline or have someone who needs something done right now!
None of what I do works that way. We take our time and establish goals. When we find a product to meet that goal we go through all the details before a commitment is made. I’ve had some clients think about using an annuity for several years before actually moving forward. It’s a methodical process and I have hundreds of newsletters and videos so that you can go through it at your own pace and on your own timeline. In the recent weeks, when investment guys are maxed out, I received only a few messages from clients. All of them thanked me for the security provided by annuities so that current events didn’t affect them negatively. Here’s one of my favorites below.
“Hey good morning. This is the first time in 50 years I haven’t really freaked out over a big market decline. Thanks.”
This guy has been with me for a couple years and has a SPIA that started giving him monthly income last year. He’s got plenty of money but it’s still unsettling to see a large decline. We spent several months in 2023 making sure he had the best deal for his goals and he got it right. He doesn’t have to cut back because the market lost more than 20%. Lots of other people are in the same situation with either guaranteed income or just a pile of safe money that they don’t have to worry about. Everyone seemed to know that the market rally wouldn’t last forever but not everyone made sure their retirement was guaranteed before chasing it.
Before the biggest part of the meltdown I had a couple of clients who were about to lock in a nice yield with their indexed annuities. The market had already shed more than 10% of its value but these guys were still on the upside for the year. That all changed in two days when another 10% of the market value melted away, leaving these guys with 0% return instead of locking in a nice yield. While it’s not what any of us wanted, the alternative would have been to see gains disappear and the account actually lose money. All market gains are on paper and don’t really belong to you until you sell the stocks. In reality, most people didn’t lose any money because they never had it in the first place.
Let’s not forget to keep this in perspective. The stock market has more value today than it did two years ago. And depending on the daily swings it may have more than just a year ago. Many of you are worrying about losing money that never really existed for you so don’t let it get you in a hurry. Spend some time looking at ways to avoid it and how you can guarantee a retirement outcome so this stuff doesn’t really hurt. I’ve never met a single person of retirement age who wouldn’t benefit from having some type of annuity in their portfolio. Not everybody does it but all who do will recognize the value eventually.
Have a great weekend…
Bryan
Watch Annuities are Calculated Decisions – Stocks Get You in a Hurry
Last Updated on April 18, 2025 by Bryan Anderson
