The stock market is in the middle of one of the longest bull markets in history, if not the longest. Going back to March 2009, the S&P 500 has increased more than 320 percent. Although there have been some pullbacks along the way, the markets are nearing their 10th consecutive year of upward movement.1 Nothing lasts forever, though. At some point the market will correct, and the prolonged bull market will come to an end. In fact, the end of the bull market may be approaching. On Oct. 10, the Dow Jones Industrial Average (DJIA) dropped more than 800 points. The loss was based on a variety of fears and uncertainties, including rising interest rates, the impact of tariffs and corporate earning challenges.2 It’s never wise to try to predict a market downturn or time the market. However, it may be a good time to analyze your strategy and see if it still aligns with your long-term needs. There may be steps you can take to minimize your risk exposure and weather the potential downturn. Below are a few strategies to consider: Don’t make an emotional decision. It’s natural to become more risk-averse as you near or enter retirement. After all, you worked hard to accumulate your savings. You may need to rely on your savings to generate retirement income. You likely don’t want to see your balance decline because of a market downswing. However, it’s important to remember that you could be retired for several decades. You will need some level of growth to fund your expenses and lifestyle over that long period of time. You also may need to increase your income over time to keep up with inflation and pay for health care expenses. Growth and risk often go hand in hand. Many of the investment vehicles that have no risk exposure also offer little growth potential. Resist the urge to move everything out of the market. Instead, review your long-term plan with your financial professional. You may find that a different allocation may be more suitable or that certain tools could help you minimize your exposure. But don’t make an emotional decision to abandon your strategy. Cut your spending and save more. Budgeting and spending discipline are always wise strategies. They’re critical during a correction or market downturn. If you’re retired and using your savings to generate income, you may want to reduce your spending and distributions. The combination of withdrawals and market declines can have a significant impact on your assets. You can reduce the damage by limiting your spending. If you’re not retired yet, consider looking at this time as an opportunity to increase your contributions. You could increase your deposits to your 401(k) or IRA and take advantage of reduced asset values. Take a look at your budget and identify areas for cuts. Explore tools to minimize your risk exposure. Finally, talk to your financial professional and explore tools that can protect your retirement income and minimize risk. For instance, annuities can be used in a variety of ways to limit downside exposure. An annuity with a guaranteed income rider can provide you with a defined stream of cash flow that’s protected for life, regardless of whether the market declines. A fixed deferred annuity can offer predictable interest rates. Ready to protect your retirement from risk? Let’s talk about it. Contact us today at Stoll and Basler Financial Services. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation. 1https://www.fool.com/investing/2018/08/29/were-in-the-longest-bull-market-in-history-what-sh.aspx 2https://www.cnbc.com/2018/10/10/why-this-market-selloff-isnt-like-the-correction-earlier-this-year.html *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18155 - 2018/10/17 Comments are closed.
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