Stewart Ogilby
Stewart Ogilby
Investment Fiduciary
The stock market is a giant casino addicting millions. The central banking cult has unlimited funds. To make us feel good (while it trashes rights and wages senseless wars) it makes the market go up. To fleece us, it crashes the market. Don't be a puppet.*
* Illumimati: The Cult that Hijacked the World - 2008, by Henry Makow PhD.

Investors who were burned badly in the "dot-com bubble" and again in 2008 blame their losses on Wall Street greed. Many persons, as Dr. Makow, sense a deliberately destructive political agenda.

Retirement hopes for Americans who have worked for a lifetime have been thwarted by the very low interest rates established by a cartel of private banks called "The Federal Reserve System".

Those of us who have lived in this country for a number of years realize keenly that times are changing and we fear worsening conditions.

It is not comforting when one realizes that retirement assets positioned in dividend-paying stocks for income can, in a matter of a few days or even hours, be drastically reduced or even wiped out in the stock-market.

The central bank in the U.S.A. (the Federal Reserve) has flooded our economy with money destined to result in high price inflation that destroys the purchasing power of money held as cash.

Advisors persist in suggesting mixes of 20% bonds and 80% stocks, or 40/60, or 50/50, with the idea that bonds are particularly safe and off-set stock-market risk. Diversification, the traditional approach for coping with market volatility, didn't work in 2008 when all investment classes tanked.

Many persons do not understand the risk posed by inflation to conventional bonds and bond funds. Bond yields and current values move in opposite directions. Floating rate bond funds and inflation-adjusted bond funds, on which interest payments adjust, may maintain their values in a rising interest rate environment. In times of general interest rate increases (inflation) individual bonds can be a disaster if needed to be cashed for living expenses, a medical emergency, or due to reduced investment income.

In order to survive in retirement financially you cannot afford to lose any "nest egg" money whatsoever, unless you happen to be a multi-millionaire. The alternative to stock-market risk are fixed interest-bearing accounts held by multi-billion dollar institutions: CD's and fixed (not variable) annuities. Of these, CD's provide much less in the way of yields and tax advantage.

A few words about combining savings with life-insurance

U.S. life insurance companies, an industry of historically questionable public integrity (see bibliography), is now aggressively selling a variety of whole life insurance called by various names, Universal Life (UL), Indexed Universal Life (IUL), and Equity Indexed Universal Life (EIUL), all focusing on the accumulation of retirement funds within a "permanent" (lifetime) life-insurance policy.

These newer varieties of lifetime life insurance, generally sold regardless of the need for lifetime life-insurance, are predicated upon cash-value accumulations that I, along with many other fiduciaries, consider highly problematical. For a comprehensive financial analysis of this issue, see this article. If you purchased such a policy and feel that it was misrepresented by the selling agent, for legal help see this website

The article referenced above addresses the inefficiency of combining savings in a new generation life-insurance policy versus meeting mortality risk by purchasing low-cost term insurance and funding ones's savings separately in market index funds. We could not agree more, bearing in mind that index funds are fully subject to market volatility risk that epitomizes the sequence of returns problem potentially devastating to older investors.

Whereas CD's address the volatility issue, their yields are minimal compared to those credited to deferred fixed annuities, shorter terms of which offer considerable liquidity. A fixed deferred annuity can provide you safety of principal subject to an insurance company's financial ability to meet its contractual obligations. This is a very different product from a "variable" annuity that is subject to market risk and in which money can be lost. For reasons mentioned above, we often recommend that some portion of one's retirement nest-egg be placed in these products.

Not only does money in a fixed annuity never go backward, it is guaranteed annual growth. The five year period of 2007-2012 saw an essentially flat return (.07%) in the stock market. In its worst year, when stocks lost 43.7%, fixed annuity accounts experienced no loss and actually increased in value. These accounts have continued to grow from their undiminished 2008 values as markets rebounded and will continue growing throughout the next stock-market "adjustment".

Stockbrokers and many advisors correctly point out that indexed annuities limit the gains that an investor can receive during upswings in the stock-market. Fixed annuity products were created to combine a guaranteed growth, often together with periodically declared additional interest or an amount of growth that is a function of the increase in a market index. They protect against any loss of principal during market declines, thus solving the sequence of returns problem.

In todays world of high market volatility and periodic crashes, astute investors ought to be able to sleep securely knowing that a significant portion of their own retirement nest egg is contractually linked to the assets of one or more multi-billion dollar institutions. This is an area in which we have years of experience. It is important that your own situation and goals are addressed with appropriate financial products.

We are speaking of accounts that can never lose money due to market risk, and that investors can rely upon to produce income for the rest of their life.

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