The stock market is at an eight-year historic high. It’s propped up on excitement, enthusiasm, and positive vibes. Despite all the excitement right now, some of us remember the devastating crash that happened after 9/11 – and the crucial retirement income that was lost because of it.
What will happen when the market corrects again? What will happen with President Trump, with Congress and all of the changes going on? The thing is, the market will do what the market’s going to do. Politicians are going to do what politicians are going to do. We can’t control any of it. But we CAN control our money.
Ask yourself this – if the market goes down, can you afford to lose your hard-earned money?
I want to encourage you to properly diversify before this happens, and I have a handy formula I use to determine how much of your hard-earned assets should be invested in the market. It’s called the Rule of 100.
Simply take 100 – your age. If you’re 70, take 100 – 70 and you’ll be left with 30. 30% of your assets are what can be at risk, invested in the market. We’ll take the other 70% and put it somewhere safe and secure, where you’re not going to lose it.
If you’re 60, we’ll take 40% and put it in the market, and take the remaining 60% and keep it safe. Does that make sense?
The objective of the stock market is to buy low and sell high. Since it’s high right now, we’d use the Rule of 100 and take some of those stock market earnings off the table in order to move them into something safe and secure that you won’t lose.
Beware of advisers that tell you you’re properly diversified because you’re invested in a hundred different stocks in the market. The truth is, if the stock market tanks, you’re still tanking with it because all of your money is in one place – the market!
Proper diversification in your portfolio will include other tools to keep you balanced and secure – even if the market crashes.
Be properly diversified and you won’t have to worry about the fickleness of the market or what happens when President Trump and Congress move on different initiatives that could cause big changes.
Click here for an upcoming webinar where we will dive into some financial industry secrets that might surprise you. If you’ve already attended the webinar and would like to apply for a free Financial GPS Consultation, click here now.
Don’t get caught unprepared when the market corrects – protect your money, your retirement, your family and make a plan to get properly diversified today.Posted in Facebook Live