Over the last several weeks I have done a lot of reading and observing of the stock market. If you follow it closely or even look at the results of the daily market a couple of times a week, you can see that the market fluctuations are becoming larger. It is not uncommon that the market will swing 200 – 300 hundred points in a 24 hour period. As we approach the end of the first quarter of 2015 the results show there has been zero growth for the year. What will happen the next three quarters I do not know, however by reading and listening to some of the leading economist could give us a glimpse of what is to come.
Several economists feel that our government is lulling us to sleep. For example, in the midst of a projected zero growth first quarter both the Dow Jones and S&P 500 established new highs. For about a month many of us enjoyed gas at around $2.00 a gallon or less. Interest rates for home loans have been at 3% or less and the average home in the Charlotte market has been sold within three weeks of it being listed. You would think that happy days are here again as they would say in the 50’s. However if you look below the surface there are some eye opening facts that have not been talked about.
Porter Stansberry, a financial researcher who predicated both the mortgage crisis and the fall of General Motors points out the following:
- 75% of Americans are living pay check to pay check.
- The labor force in the US has fallen every year since 2007
- In the last 6 years the number of people on food stamps have doubled
- Since 2006 the national debt has increased by 400%
Robert Shiller, a Yale professor of economics and 2013 Nobel Laureate recently did a study on the bond market that reached a 40 year low of 2.25% on January 30th, 2015. The bond market has had a slight increase since then but he remains cautiously optimistic of what could happen in the future. He also cautions and predicts that there will be a major downward correction at some point. Keep in mind that history shows that every 5-7 years there is a correction in the stock market. Sometimes these corrections are deep like the last one in 2007 & 2008 that took 50% of some investor’s gains. For some investors that had these deep paper loses have just fully recovered in the last 18 months. History shows that some of the corrections have not run as deep as the last one. This leads to a personal question:
- If you have your eye on retirement, in the not so distant future, or in retirement will I financially be all right if a correction occurs.
- If you are supplementing your income from the interest/dividend from a variable investment i.e.: individual stocks or mutual funds will a decrease in this income affect my life style.
If you are unable to answer these question with a resounding “YES” then perhaps you should consider contacting our firm and request one of two books that we have available that are written by National Best Selling Author Patrick Kelly. Both of his books “Stress Free Retirement” and “The Five Retirement Myths” outline the benefits of a Fixed Index Annuity. These books will outline the benefits of an “FIA”. They will be sent at no expense to you. Additionally no one will harass you trying to sell you something. These books will help you determine if an “FIA” will fit into your financial portfolio. This type of annuity will lock in your principal and if the market makes a correction you will be protected. If the market surges then you will earn the gains of the stock market without taking the risk. You will also win as your gain will be added to your principal and then you have a new figure that cannot be taken away from you. This type of annuity has other benefits as well such as a bonus on your initial deposit, the ability to withdraw up to 10% of your principal without a penalty. An opportunity to add an income rider that will automatically add between 6-8% per year (depending on the insurance company) to your balance. This will be added each year until you choose to begin taking a monthly or annual income. Many Fixed Index Annuities have other living and death benefits that you can choose from. This annuity truly is recession proof.
To learn more about John CasaSanta please visit our website www.casasantafinancialservices.com. If you have any questions for John or would like a free portfolio review please e-mail him at firstname.lastname@example.org or call 704-451-7020.