Making money when it goes up, not losing when it goes down.
Most Investors seem to want the same things—a high return and no risk of loss. While this combination is hard to come by, in this issue, I’ll tell you about an investment that comes as close as possible.
The investment works as follows:
1. You deposit or transfer in a sum of money
2. The money earns 80% of the increase in the S&P 500 for the year.
3. If the market goes down, your account does not fall, you simply earn 0% and preserve your account value.
4. At the end of the fixed period, you are guaranteed a certain sum back that is larger than your initial investment even if the stock market has declined every year. Thus we have an investment that goes up with the market yet does not go down when the market does.
Here’s how I see it:
If your variable annuity or IRA is down (as a result of the stock market) This is probably the best repair strategy for the account. If the market goes up, you participate in the appreciation. If the market continues going down, you have protected your principal. And by the way, because its an annuity your growth is all tax deferred and the principal is guaranteed by the issuing insurance company.
