Reducing Investment Losses
Everywhere you look and read the retirement savings body count keeps mounting.
Covid-19 has not only ravaged the health and lives of all in its wake but it has also ravaged the financial futures of billions of people across the globe.
THE HEADLINES READ:
World’s Largest Pension Fund Loses $165 Billion in Worst Quarter
Most Pension Funds Reporting Double-Digit Q1 Losses
Public Pension-Fund Losses Set Record in First Quarter
State and Local Pension Funds just Endured their Worst Quarter on Record
Coronavirus Crisis Cuts Average 401(k) 19% as Pandemic Pummels Retirement Savings
401Ks Take A Beating, So When Can You Recoup Your Losses?
It should come as no surprise that pension funds and 401(k)’s have taken a beating during the Covid-19 induced recession.
Heavily invested in public equities, the fates of retirement plans rise and fall with Wall Street and since the start of the Covid-19 pandemic, the Dow has taken a beating.
With most retiring Americans already financially ill-prepared for their golden years, few can afford to see their retirement accounts shrink by 19% or more. And just like during the Great Recession, scores of millionaires were no longer millionaires – almost overnight.
Unlike many of the investing public who have their retirement fates resting on Wall Street, the ultra-wealthy avoid public market volatility and always seem to ride out financial storms better than any other group. That’s because not only do they know how to build wealth in good times, but they know how to preserve it in bad times.
Preventing losses in a downturn is always a top priority of the ultra-wealthy.
And they never wait for the other shoe to drop to proactively mitigate their losses – often months before anybody else sees signs of a potential downturn.
Unlike retirement plans, the investment decisions of the ultra-wealthy are not based on trendy Wall Street stocks, up and coming industries, the next hottest tech stock, or the next great new hope gadget slated to solve the world’s problems.
Instead of chasing rainbows, the ultra-wealthy are more interested in preserving their pot of gold. And like gold, their investments are tangible – assets you can touch and feel and can never disappear as stocks do.
One of the key strategies the ultra-wealthy use for minimizing losses and preserving wealth in a downturn is to avoid volatility in the public markets. The ultra-wealthy divested their equity positions long before the latest recession hit.
Some ultra-wealthy investors not only minimize losses in a downturn but thrive.
Leveraging cash, they’re able to pick up valuable income-producing assets at fire-sale prices. Snapping up bargain income-producing tangible assets like real commercial assets at high cap rates and cash flow businesses, commodities, energy, and agricultural assets in the right segments that thrive in downturns provide these ultra-wealthy investors with rates of returns unmatched even in good times.
Take a look at your portfolio and your current investment decisions.
- ARE YOU TIRED OF FOLLOWING WALL STREET DOWN THE RABBIT HOLE?
- FOLLOW INSTEAD THE HABITS OF THE HIGH-NET-WORTH INVESTOR.
- DOES YOUR CURRENT INVESTMENT MIX TO REDUCE POTENTIAL INVESTMENT LOSSES BY INSULATING YOU FROM RECESSIONS AND INFLATION?
Consider Investing for income and invest in real, private companies to afford your portfolio the protection it needs.
Avoid being heavily vested in public equities.