Record highs for stocks. Record lows for interest rates. Recent months have seen new records for the stock market and a continuation of the historic lows for interest rates. Consider these facts:
• The S&P 500 Index, which tracks the top 500 U.S. stocks, surpassed 1,900 – a record.*
• The Dow Jones Industrial Average, which follows 30 large publicly traded U.S. stocks, topped 17,000 – a record.*
• Certificate of deposit (CD) rates have never been this low for this long, with 6-month CDs below 0.15% – a record.*
• The Federal Reserve has kept rates on short-term funds under 0.25% since 2008 – a record.*
The stock market has made a steady recovery since the financial crisis of 2008, and the growth in the past year has translated into attractive equity gains for many investors. But with these new records, people are now worried another stock market drop could come to threaten their retirement plans.
Some investors have sought shelter from market volatility in certificates of deposit (CDs) and money market accounts. Unfortunately, those accounts have set records of their own – historically low returns that have not kept pace with inflation.**
There Could Be a New Way
There are new annuity products now available in the industry that allow you to participate in the market’s upside potential while setting a limit on your downside risk. Other annuity options let you guarantee a retirement income you cannot outlive. The new record stock market highs and interest rate lows could mean it’s time to review your current portfolio and discuss these new opportunities. It may be time to protect retirement gains and reduce risk as part of your overall investment strategy.
For more information about new retirement planning options, contact Jeff Hamm, the NCU Wealth Management Representative located at Navigator Credit Union at 228-474-3427.
* SOURCE | Dow Jones Industrial Average and S&P 500, finance.yahoo.com; 6-month CD rates, ratewatch.com; Federal Funds Rate, bankrate.com; July 30, 2014.
** Campbell, Dakin, “Banks Want Higher Interest Rates,” BusinessWeek, Bloomberg, November 2013.
All guarantees are based on the claims-paying ability of the issuer and do not extend to the performance of underlying accounts which can fluctuate with changes in market conditions.
Representatives are registered, securities are sold and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, IA 50677, 866-512-6109. Investment and insurance products are not federally insured, may involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. ANN-1213-NMPG