Question:
My parents are concerned market will crash again, as it did in 2008. They are fearful of investments, the market, etc. How can I allay their fears?
Answer:
The answer falls back to our Ten Year Rule in that any money needed in the next 10 years should be in fixed-income investments that match your liquidity needs. Any money not needed should be invested in high-quality stocks or mutual funds for growth.
So many investors ask us what is going on, or what is going to happen in the market. They bought what they thought were safe investments. Some who invested in Pimco bond funds were down 4.34% in the last quarter. Over the last five years, the markets have been up about 8.24% on an annualized basis. In the last two years, the markets have been up around 16.7% on an annualized basis. Those that sold during the bottom missed the comeback.
The reason we have our Ten Year Rule is that it gives you the opportunity to wait out a depressed market. You have the ability to wait out the bottom. We agree that bonds are safe investments, but only when held to maturity.
At Henssler Financial we believe you should Live Ready, which includes understanding how to plan for your liquidity needs. If you have questions regarding your investment strategy, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
