The Rainbow Strategy (Global Lookback)

The Rainbow Strategy

In these times of high volatility, people are looking for ways to diversify their portfolio in order to protect their nest egg and try to capture as much of the upside as possible.

But what exactly is diversification? Is it choice? A Jelly Bean Store can have thousands of different choices of colors and flavors but everything you buy is still a jelly bean.

True diversification is a mixture of uncorrelated, or lesser correlated, items. When looking for diversification for where you put your nest egg, you want to be spread out across the different economies around the globe.

Where do you think we are going to see the economy improving in the next ten years? China? Europe? Japan? America? How would you like to be in a position where you would not have to guess which economy will grow the fastest to be able to take advantage of that growth? That is what the new “rainbow crediting method” does.

Many of the experts familiar with this strategy say it is like being able to bet on the race after the horses have run. Here is how it works. The strategy uses four indices from around the world: the Hang Seng in China, the Dow Jones Eurostoxx 50 in Europe, the Nikkei 225 Index in Japan, and the S & P 500 in America. This strategy is not only diversified using economies from around the world, but it is also weighted so that most of the money is going to the indices that are producing the best results.

Learn about the rainbow strategy in my book, Outlasting the Storm: A Survival Guide to Retirement Income Planning

Is this the Real Super Annuity?

Phillip Wasserman - savings

This past Sunday afternoon I received a call from a very good friend of mine who runs one of the most successful annuity shops in the country. He starts explaining to me about a new product that will be available this week. Hesitantly, I tell him I don’t believe a word he says, and he comments back, “ Phil, I thought it was too good to be true too.” Then he sends me an email proving everything he said was spot on as usual.

I’ve been very disappointed in annuity companies recently for a number of reasons. They have reduced the benefits of their products, cut agents’ commission significantly, and are blaming low interest-rates (that might be acceptable if they had not been booking record profits the whole time they are trying to help clients).

I’ve trained thousands of insurance representatives — most of them are very hard-working, good people dealing with an environment where they are at war every day with companies regulators and they have little control over the products. Annuity products are presented to the public so complexly that you would think it was done on purpose — but this one is different.

So, back to this new product. It has one of my favorite features — liquidity — you’re able to get your money back in a short time without surrender penalties, and that is magnificent. You also get uncapped growth, which means there’s no limit to how much money you can make and the income is the highest you’ve ever seen.

When you add in it’s a quality company, it’s a recipe for major success.

I have no doubt within a very short time it will be the number one annuity in the country and everyone else will be chasing it. Yes, the product is that good.

If you’ve ever thought of buying an annuity, now is your chance. Fortunately it’s available through a lot of very good representatives nationwide, although it is not available in every state just yet. If you’d like some information on this email or call me and I’ll be sure to steer you to great rep in your area.

Phillip Wasserman’s Take on the Department of Labor Ruling

Justice Scales

Once again the insurance industry stuck its head in the sand and waited for the government came by to kick it in the rear end with the Department of Labor’s recent fiduciary rule.

For those who don’t remember it was my legal brief that overruled 151A. Through my relationship with the Speaker of the House, myself and others successfully lobbied to have the government change the law on annuities. We made sure the law in Florida was not changed to a 5-5 annuity.

In my legal opinion, I agree with many other attorneys that, if handled properly, the rule will be overturned. If not, most of us can kiss our annuity business goodbye. While I am almost 100% convinced that the rule will eventually be overturned, I am certain that it will costs hundreds of thousands of dollars in the process. On a personal level, I am not too concerned. Most of my work is in the life insurance sector these days. But what concerns me is that the companies don’t appear to prepare for moments like this. You’d think they would know how to handle this. Instead, it seems as if they don’t have a care for people like you and the ones they assist.

My thought is just another in the mix. With it and five dollars, you can buy a coffee at Starbucks. Take with it what you will, but I am not a fan. In time, along with a hefty bill, the rule will likely have a short shelf life.

Are Annuities Right for Your Plan?

Source: GotCredit

Source: GotCredit

When it comes to personal finance and retirement planning, there is no one size fits all method to follow. Every circumstance and situation creates a need for a different approach. What might be right for you could be the worst option for another retiree.

Usually, an annuity becomes an option for a retiree when they have maxed on more traditional tax-advantageous investment options, like 401(k) and IRAs. As CNN Money noted, “If you have additional money to set aside for retirement, an annuity’s tax-free growth may make sense – especially if you are in a high-income tax bracket today.”

Annuities certainly can be a buyer beware-type atmosphere. Without the proper analysis of your potential investment, you could be investing in a lemon when you wanted stability. It’s why I always stress the mandatory need for thorough research conducted before taking the plunge. Not only should you ask every question you have to your finance professional, but you should research these answers yourself as well. At worst, you’ll find the same information your professional presented you, and now you’ll have more material to make the best decisions for your retirement.

If you’re uncertain if an annuity is right for your investment plan, see if you fall into these situations:

Outliving Your Money? Guarantee Your Income

For those worried that they might outlive their money, an annuity could be the option to ease their fears. With life spans extending and markets always susceptible to volatility, many annuities ensure that you are taken care of regardless the scenario. Immediate annuities could be right for you. Another option to consider is investing in multiple annuities to protect yourself from an insurer potentially going under.

Depending on your advisor, you may hear that an immediate annuity is best. Others might suggest an inflation-adjusted investment to protect you and your heirs. Again, it’s all about what fits you best. Consider all the elements that go into your planning. You have to factor in the annuitant’s age, investment amount and other key factors before determining the proper course of action. If you choose correctly, you can breathe easy knowing your income is ensured while protecting your principle.

Conservative Seniors

The investment landscape shifts as interest rates go lower. As they do, traditional conservative options, like CDs and money market accounts, prove less like the tried and true method they once were.

With annuities, you have various options to match your investment as well as your risk tolerance. While I highlight seniors in this category, any conservative investor could be a fit for an annuity–especially a fixed option. Not only will this conservative approach ensure you have a lifetime income, you now have the opportunity to earn more than other options. The aforementioned CDs and money market accounts definitely have earning potential, but an annuity may be the right fit for you if you’re the kind of conservative looking to generate the most return on your investment.

When comparing money market and bank CDs to a fixed annuity, you begin to see that the annuity investment is the only option that guarantees you income for life. Additionally, it’s tax-deferred accumulation benefits are often alluring to those otherwise considering a non-qualified investment.

Certainly, other individuals fit the bill for an annuity investment–and some in the above instances might be better on another route. However, these are some options worth considering as you move forward in your planning.