Discussing an option to help with the volatility in markets and lack of safety
June 23, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this past week. My name is Jake Sanders, and I am a partner at Wealth E&P and operate as a Wealth Advisor and Certified Financial Planner. I hope that you're having a great summer so far and surviving this heat!
Today, I just wanted to start by posing a question: what is an investor to do in this market environment? By this market environment, I mean what you probably already know, and that is that most major indices are down and there are not a lot of good places to go.
As you can see above, the S&P 500, Nasdaq, and the Dow Jones Industrial Average are down significantly year-to-date. On top of that, the aggregate global bond index is also down almost 15% for the year, and that's just barely behind the Dow Jones Industrial Average. That is historically where investors have often gone to provide some ballast and to offset some of the volatility that we're seeing in equity markets.
So, what's an investor to do? At Wealth E&P, we've been using a product that provides 95% downside protection. In other words, if you put $100,000 in, just for an example, at the end of the duration of this product, the worst you would be down is $5,000. It also has exposure to various equity indices, such as the Nasdaq, the Dow Jones, and the S&P 500 for example.
In this environment, where I believe that equities are fairly valued, we could see a continuation of the sell-off. However, going into the rest of the year, I also see an excellent possibility that we have good returns. So, what are we to do to protect ourselves, be prepared for both scenarios, and grab the upside if it's there? We've been using these products and have been folding them into some of our portfolios. We currently use them with individual clients, and we feel like they're going to provide great ballast for our clients going forward.
If you have any questions about any of this, we would love to hear from you. If you have any other questions for us about your portfolio, financial situation, or retirement, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
At Wealth Enhancement & Preservation, we are here to serve as your financial advisor and source of support in the Alpharetta, GA, Cartersville, GA, and Charleston, SC areas. Our advisors are dedicated to simplifying the complexities of the financial world and as your advocate, we strive to learn about your most valued goals and dreams. From individual investors to entrepreneurs, our services are designed for your success.