June 15th, 2019
What is Asset & Portfolio Protection (and does it apply to me) –
For those of you who are avid readers of our newsletter know that we tend to be more moderate to conservative than a pounding the table Bull on the markets and investing. For those of you that are our clients know that we typically will create a diversified portfolio with both a short-term and long-term view. Of course, everyone wants all the upside of the market (including their portfolio) and no downside, who doesn’t. The reality is a diversified portfolio has been proven over time the way to go based upon your “Life Stage”, “Time Horizon” and “Risk Tolerance”. For those of you who have or haven’t worked with an Investment Advisor and has discussed those three things when putting together a portfolio, shame on them and shame on you. It doesn’t matter whether you have $50,000 or $5,000,000 in your portfolio. Everyone is different.
Asset Protection – any assets that are not financial (i.e. cash, stocks, bonds, ETFs, Mutual Funds, Savings Bonds, 401k, etc.)
Portfolio Protection – all financial assets that are not real estate, cars or other hard assets.
Other questions that apply are the following that would significantly impact your diversification;
- How many years until you want to retire? (want to work, not have to work)
- Are you supporting any family members or extended family?
- Do you support any Special Needs family members?
- How is your Health? Do you have debilitating, congenital or chronic health issues?
All the answers to these questions contribute to your portfolio allocation and more importantly, what percentage of your assets/portfolio do you need to protect, both short-term and long-term.
Regarding “Asset Protection”, this is something you should speak to a Trust and Estate attorney. If you have hard assets and family to pass down too, then you need to consider having a Trust setup to protect those assets and when the time comes to determine on how you want to pass on those assets. Atlas Wealth Management and its employees “are not attorney’s” so we can recommend what type of Trust or how the components of the trust should be configured. We can recommend one or two people for you to consider and speak with, but we manage several Trusts and Estates and has helped families consider long-term planning and helped out the current and future generations to come.
Portfolio Protection has several strategies, but want to offer you some tangible ideas and help foster some communication between us in the short-term, while we talk about the long-term.
Portfolio Protection IMPORTANT NOTE – each person is different, but unless you have health issues, a very short horizon for investing or when you need access to your money, you should consider less than 20%-30% of your portfolio in any Annuity vehicles. Any person that tries to sell you an Annuity(ies) that has more than 40%, 50% or more of your total portfolio net worth has an alternative agenda. Unless you are completely fearful of having any money in the market, you need a specific reason why MORE THAN 30% of your overall portfolio should be in Annuity(ies). This is the opinion of Ron Lang and his many years of experience investing, managing portfolio’s and offering “select” annuities for the right situation.
Between NOW and the end of 2020 as we’ve written in our newsletters for the past year, the markets will be volatile and at times (especially during Presidential Election season of 2020) will get very volatile. We have clients that their stomach turns when the market is down 1% in a day after a runnup of 8%-10% in the market. That is too much emotion with all the ups and downs of the market. Our newsletter and any writings we have published have never been political, and never will. We have more discourse, politically and societal today. Personally, it’s frustrating and disturbing, but we don’t expect it to simmer down before or after the 2020 Presidential Election. Volatility in the markets may actually accelerate.
If you are looking to Protect a portion of your Portfolio and/or just worried about the world and the markets in general, then you need to consider the following:
Disclosure – the amount and actual percentage of your portfolio in any of the annuity vehicles is determined on a “case-by-case” basis and need to speak with Ron Lang to determine which one(s) may be the best fit for you and your family.
Portfolio Protection Ideas
Fixed Rate of Return Offerings:
3 year Annuity with a guaranteed 2.5%* each year with 100% Principal Protection
5 year Annuity with a guaranteed 3.2%* each year with 100% Principal Protection
7 year Annuity with a guaranteed 3.3%* each year with 100% Principal Protection
*Guaranteed Fixed Interest Rate may change each month before you sign the Annuity Contract. Once you sign the Annuity Contract, you are are “guaranteed” that Fixed Interest Rate during the term of your contract. There are more features, just ask – CLICK HERE
Fixed-Indexed Annuity Offerings:
5 year Annuity – your principal is 100% guaranteed and locks in at a higher point after each anniversary date(annually) of the 5 year annuity contract. If the investment vehicle in the annuity is down during any year of the contract, you still have the balance which is 100% principal protected since the prior year of the contract. If the investment vehicle is up after each anniversary date(annually), then you add approximately 60%(of the upside) to your principal balance and that becomes your new principal floor (which is now 100% protected). For example, if you have $50,000 in your annuity contract balance and there is $2,000 added in upside from the year, then your new balance is $52,000 and you cannot lose any of that balance, even if the investment vehicle is down for the balance of the contract. If needed, it has a 10% penalty free withdrawal each year of the contract. There are more features, just ask – CLICK HERE
8, 9, 10 Year Fixed-Indexed Annuity – This fixed-indexed annuity has different lock-in choices based upon how many years you want the annuity contract. In any of the annuity contracts, your principal is always 100% protected. There are both Income and Death Rider benefits if you want to add those features into the annuity contract. You also have a 7% penalty free withdrawal each year of the annuity contract. There are more features, just ask – CLICK HERE
Other Questions or Concerns
If you are new to annuities, they are fixed-rate and fixed-indexed annuities that has NO upfront or hidden fees in any of the ones mentioned above. The fixed-indexed annuities only has a fee when there is upside during the lock-in period, meaning you essentially “share in the upside”, then the balance of the shared upside is added to your account balance to create a new floor that is 100% Principal Protected. If the investment vehicle isn’t higher at the end of the lock-in period from the balance of the previous lock-in period, there are no fees because there is no upside to share. No matter what, your principal is 100% protected.
We also offer HSA (Health-Savings Accounts)
to businesses and individuals. Essentially a HSA is like a 401(k) for your healthcare savings that is pre-tax and grows tax-free. You can also use a portion of your HSA for current year medical expenses.
We also offer Life Insurance. We can evaluate your current policy or if you don’t have Life Insurance, we can assess your situation to determine how much you need and which is the right vehicle that makes sense to you and your family. NOTE: We only offer and quote Life Insurance to Atlas Clients. If we manage your personal Investment Accounts or your Company Retirement Accounts, we can quote and offer you the best Life Insurance that fits your needs.
For several of our clients reading this, we may have already discussed this with you and own one or more of a combination of these annuities to protect your portfolio. It is important that you stay ahead of the curve with volatility and other domestic political and geo-political factors that push around our markets. At Atlas, yes we manage portfolio’s, but we truly are “Risk Managers” and manage that risk in each account for each client, both for the short and long-term. Using “select” Annuities to mitigate risk and volatility in the market is smart and prudent.
For questions, annuity information or to meet and discuss further;
Ronald E. Lang, Principal
Atlas Wealth Management, LLC
Investment Advisors & Estate Planners
401(k) Retirement Specialists
Toll Free (888)403-9400
We take the pain out of Building Wealth and Protecting Assets
(Life Insurance and low cost Fixed-Indexed Annuities)
For Management, Education, Setup and Evaluation of your Company 401(k) or SIMPLE IRA
Remember, this article and commentary is not “advice” or any form of a “recommendation”, just opinion and information to consider. Your feedback is always welcomed. Feel free to pass this email along to a friend, family member or colleague. If you don’t want to receive these periodic updates, let us know.