Growth and protection are key Protection and certainty can impact growth When you invest, it’s inevitable there’ll be market ups and downs. And for many investors, the “downs” can cause angst and uncertainty. To avoid losing money, they may shift their investments away from equities and into fixed income products like bank CDs and Treasury bonds. But when interest rates are low for extended periods—like the past 10 years—the return on these products can also be low. This creates a dilemma—having to choose between protecting your money or trying to grow it. So, what about the stock market? Finding growth opportunities may mean taking more market risk You could invest in stocks and other equities—but can you afford the risk? With volatile markets, some investors may be reluctant to stay long enough to see gains. Research cites that some investors need to “win” twice as much as they “lose” to be indifferent to risk. 2 Nobody knows when the market will see significant gains—or losses. If you’re not invested, you could miss the best days. So, how can you feel comfortable staying the course?
Over the past 30 years, CD rates have, on average, declined almost 99% 1
Over the past 20 years, the average annual return of the S&P 500 ® is 164% higher than that of the average investor 3
CDs are FDIC-insured up to $250,000 per financial institution, and there may be a penalty for early withdrawal. Fixed indexed annuities, like many investments, are not FDIC-insured and have limitations and surrender charges. 1 Source: Bankrate.com, Historical CD Interest Rates: 1984-2023, February 3rd, 2023. 2 Source: “INVESTOR EDUCATION: The Importance of Behavioral Guidance,” © 2021 PIMCO. Used with permission from Pacific Investment Management Company LLC. 3 Source: JP Morgan Guide to the Markets. Data are as of June 30, 2022. The percentage shown above is based on the difference between the 20-year annualized returns of the S&P 500 Index (9.5%) and the Average Investor (3.6%). The average asset allocation investor return is based on analysis by Dalbar Inc., which utilizes the net of aggregate mutual fund sales, redemptions, and exchanges each month as a measure of investor behavior. You can have both growth and protection What if you didn’t have to sacrifice one for the other? If you’re looking to protect your retirement savings from market loss and still want the potential to increase your nest egg, consider Target Growth 10 ® Fixed Index Annuity . It offers both downside protection and upside opportunity and can be a smart choice as part of your financial strategy.
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