Are Variable Investments Ever Safe?

Are Variable Investments Ever Safe?

The vast majority of conventional financial advisors seem to one way or the other suggest that variable investments could be safe – if you play your cards right, so to speak. They seem to suggest that pretty much all you need to do is ensure that you have the right asset allocation, or a well-diversified/balanced portfolio. And then be sure to keep rebalancing every so often.

Plain and simple, I’d say that line of thought is completely preposterous. Before I explain, let me point out that I don’t fault you – as an investor – if you subscribed to this theory up until today. The fact is that when almost everyone around you repeats the same refrains or behaviors for years (however ill-advised they might be) you’re more inclined to subscribe to them without even realizing it.

What Is a Variable Investment?

I define a variable investment as any investment that varies directly with the stock market. Sure, such an investment could shoot way up, within the twinkling of an eye – or at least, shall we say, that’s the hope. On the other hand, though, the opposite is also true, isn’t it? The same investment could take a nosedive, couldn’t it? 

Conventional theorists believe that if your portfolio is well-balanced or you mix your investments correctly, you won’t have to worry – which I must admit sounds pretty good, in theory. In reality, however, variable means variable, period! So putting a bunch of variable investments together, regardless of how well or how often you balance them, does not, has not, and will never eliminate the fact that they are variable, and that you could therefore lose everything (including the seed money you started with) at any time! Has such a thing happened in recent memory? I don’t believe I need to say any more on that, do I?

Absolutely No One Knows the Supposed Correct Allocation or Mix – NO ONE!

Unfortunately, many investors seem to miss this point. Then, whenever the stock market goes through a major downward spiral, the best explanation they usually receive from their traditional financial advisors is that they should have had the “correct asset allocation” or “proper diversification mix.” BUT, if  anyone – including all the experts, commentators, and gurus – knew or has ever had that silver bullet, why in the world would they wait only to reveal it after the fact – every time? Does that make any sense to you, whatsoever? In this country, we refer to such behavior as Monday-morning quarterbacking for a reason. Who can’t assess what went wrong in hindsight? Seriously?

So, What Must You Do?

It’s about time you stopped chasing baseless, porous theories that could potentially damage your financial assets at the time you need them most. I would encourage you as an investor to take a pause and really – I mean really – begin to focus on what will matter most above all else at the end of the day – reliable, consistent income for life. Wouldn’t you agree that you must use investments that make sense and have actually proven reliable, as opposed to leaving things to pure chance? 

Bear in mind that more likely than not, you may have to resort to alternatives that are deemed to be “unpopular,” but let’s face it: the popular thing seems to be that most retirees, after all those years of saving, planning, and “diversifying,” end up with nervousness and constant financial worry. Who wouldn’t if their life savings were variable? Irrespective of where you are in life, you can correct your undesirable investing woes with the right help, so go for it!

__________________
Contact a professional at Laser Financial group today to schedule your complimentary consultation. We'll help you explore proven, common-sense avenues for you to protect your retirement income, rather than trying to balance and rebalance it, leaving it at the whim of the stock market. 301.949.4449 or LaserFG.com.