Is Your Portfolio Ready for the Next Market Drop?

2.27.26: Audio automatically transcribed by Sonix

2.27.26: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker 2:
Welcome to Retirement Results, the national radio show and podcast for listeners like you who want to protect and grow their hard earned money in a world filled with so much uncertainty and financial risk. We seek to cut through the noise and build successful plans for hard working Americans on their road to financial freedom. Retirement results is powered by Active Wealth Management, a team of fiduciary advisors who always place your needs first and now your host. He's a registered Social security analyst, member of the Forbes Finance Council, and author of multiple books on retirement planning. Here's your chief financial adviser, Ford Stokes.

Speaker 3:
And welcome to retirement results. I'm Ford Stokes, your chief financial advisor. I'm here with Sam Davis, our co-host and senior financial advisor. This retirement results. We're so glad you're with us here. We are going to talk about how would your portfolio handle market volatility. Market losses probably saw some volatility in January and a little bit in February this year. How's your portfolio going to handle that. And you probably saw it pretty heavily correlated. All of your assets are probably heavily correlated. As the market goes down, a lot of your assets probably went down with it. And we're going to talk about what to do and how to handle market losses and how to really get to some negative correlation. Get truly diversified within your portfolio between, you know, stocks, try to maybe minimize the bonds. Go to insurance products like fixed indexed annuities, potentially even structured notes and other products that are different than just the typical stocks and bonds portfolio. And while we get started here, I want to talk about how do you get returns to recover loss. Sam, I'm going to let you give us our quote of the week, too, but want to throw up a graphic here if you've got it. Sam, um, we want to talk about what happens. Returns to recover losses. So during the 2008 2009 mortgage crisis, we had like 50.1% of the losses between March oh eight to March oh nine is what the S&P lost in actual market value.

Speaker 3:
And if you lose 50%, you're going to have to have 100% coming back. Um, to actually get back to even on your assets. So we want to do everything we can to minimize the losses. And that also means get smarter. It means take like the 40% of our actual portfolio, which is the income portion of our portfolio. You may not realize that, but a lot of portfolios are built for 60% stocks for growth and 40% to give us income through bonds. Wouldn't it be better if you replaced the bonds with fixed indexed annuities, deleted the advisory and portfolio fees, and also made sure that you couldn't lose any money, any principal with 40% of your assets or even 50% of your assets. That would be a pretty good idea, I would think. You want to really protect the income portion, make that a fortress around the income portion of your portfolio. But again, if you lose 50% of your of your assets, you're literally going to have to have 100% gain to come back because you're going to have a lower principal. And that leads right into our financial wisdom. Quote of the week from Warren Buffett that, Sam, you're going to give us right now.

Speaker 4:
And now for some financial wisdom, it's time for the quote of the week.

Speaker 5:
We're going to share with you on this week's quote of the week, Warren Buffett's first two rules of investing. Uh, here they are. Rule number one never lose money. Rule number two. Never forget rule number one. And he lays it out plain and simple for you. And a lot of you may know people who have retired recently. Maybe they retired in 2022 right at the start of a market dip. Maybe they retired right before the pandemic or amidst the pandemic when markets were falling. Um, my grandfather, my father's father, retired in 2006, right before the market crash of 2007 to 2009. And that was one where we saw a 50% drop in the markets. And if it wasn't for his pensions that he had from both the military and the company that he worked for for a long time, that would have been a much bigger blow. So this is especially important to those of you who are preparing for retirement, and you don't have a pension from your place of work, because when you go through these these dips like we saw in 2022 or 2020 or in 2008. It does take quite a bit to get back even a modest dip of 30%. You're going to have to get 43% to come back to even. And who knows how long it takes for that recovery. Meanwhile, you have somewhere between 2 and 4% inflation. We all know that things are getting more expensive. We're going to talk about that later in this episode. So it's just really important, you know, when you were younger your investment strategy was likely invest high risk.

Speaker 5:
You have lots of time. You have maybe 20, 30 years ahead of you to work and continue to save money. You can afford to take that risk. But as you get closer to retirement, you've been lucky enough to build up this portfolio and build up your savings. You have more to lose than you ever have before. You really want to place a safety net around that. Try to declare victory. And it's just so important for and you want to make sure you have those guaranteed income sources to really lessen the blow, because if you're retired for 20 or 30 years, you're going to see some down years in the market. We're not all going to see up years. So you want to start your planning. You know, on our last episode we talked about results in advance planning. You really want to start it by focusing on those guaranteed income streams. Do you have a pension? If not, Social Security becomes even more important. And Ford, we're lucky to have you and also Matt in the office, both registered Social Security analysts in the state of Georgia. It's a great organization that helps us help our clients decide when's the best time to turn on Social Security and Ford, I've got to be honest, it's something that we are talking about all the time because there are legislative changes. There are so many decision points, and we want to help people make that decision once and get it right.

Speaker 3:
Yeah, there are over 2000 decision points with Social Security. And so you want to make sure that you're doing all the right things. As a registered Social Security analyst, it's my job to help people maximize that Social Security income. We use our RSA roadmap to do that. We plug in your XML files, your X-ray Mary Lima file from SSA gov. You go to SSA gov and get your XML files, kind of like a CSV file. Give those to us for both spouses. We'll put it into our portal, into our um into our computers and give you an incredible, robust 16 page, uh, plan. That's pretty, pretty amazing. That RSA roadmap really gives you a roadmap for Social Security. But a lot of people think, hey, I'm just going to be able to depend on Social Security to be able to make it. Well, the average Social Security payment is right around. It's roughly around 2000 a month, so it's 24,000 a year. But most retirees need between 27 to $90,000 per year, depending on the location. If you do the math, there's a huge gap to fill there, and we want to make sure that we can fill that gap with consistent income with things like a fixed indexed annuity instead of bonds because in let's say, bonds have interest rate risk.

Speaker 3:
So in an environment where you have interest rates are increasing, like during the Biden administration years, that was a real problem for people because bonds were having their worst years ever, because people had to then discount the bonds they held because the higher interest rates, all the people were trying to get access to the new interest rates and the new bonds that were coming out with higher interest rates. So you don't want to take market hits on your income portion of your portfolio because you're you didn't buy the 40% of your portfolio in bonds to get growth. You bought it for income. And I would I would say there's really no reason to have bonds in your portfolio. You really should just replace the bonds with fixed indexed annuities and let that money really grow, get market like gains, but also get a higher payout factor and a higher payout ratio than the typical 4% withdrawal rate. That's a really good idea to do to historical context here. Social security, started in 1935, is based on life expectancies of that era. System wasn't designed, wasn't really designed for people living 25 to 35 years in retirement.

Speaker 3:
The program continues to struggle to keep up. It's going to be 2033, 2034, 2035 where the OSD, the old age survivors, um, you know, that trust fund is going to be depleted. The OSD, that trust fund could be depleted, um, literally in just a few years. So you've got to do everything you can. Um, we've got to make sure that we're doing everything we can to fortify our own retirement income, not just, um, depending on Social Security as well. Um, we're really looking at a potential 23, 24% cut across the board when that that old age Survivors Insurance Trust fund is actually depleted. And, you know, for the the Cola for 2026 was a 2.8%. I think many of us feel like, you know, what they the the cost of inflation, inflation is much higher than 2.8%. I think that's why we feel we're going to the pump. We're going to the grocery store. Um, so let's just do everything we can to make sure we're maximizing the income so we can stay out in front. And we can start with that positive retirement income surplus and not that negative retirement income gap. And then also, Sam, why don't you give us an update on the national debt?

Speaker 5:
Yeah.

Speaker 3:
National debt.

Speaker 5:
National debt is at 38.7 trillion. Looking at this in February 2026, you know, on the last episode, we gave a quote from Ben Franklin. He said, beware of small expenses because a small leak can sink a great ship. We have a lot of expenses in this country, and our debt has become a problem, and it has us concerned for our clients that taxes may likely go up in the future. And when you're already facing the headwinds of inflation and we're all living longer, so there's longevity risk and we're trying to manage our investments in the market, but make sure we have that income that we need throughout our entire lives. The national debt and potential tax increases just becomes another problem that we want to make sure that our clients are prepared for, and make sure we're building in a buffer into our plan, you know, for we don't want to build plans that just help our clients make it every month and they're living paycheck to paycheck. We want to make sure that you have some room, some flexibility in your retirement to have those years where you pull out more that if inflation, you know we have a bad year, then you're going to have that room. And it's just good to be aware. There's not much that we can do to control our national debt on an individual level, but we need to understand that this could mean that taxes are going to go up in the future.

Speaker 3:
What it means to me is if my retirement is to be, it is up to me, and it means that we've got to do everything we can to plan. And for when I'm planning for clients and when you're planning for clients, we're doing everything we can to protect that income portion of the portfolio so that people aren't panicking, they're getting consistent income, and they're letting the rest of their assets grow, and they're getting a higher payout factor than they normally would. And they're also growing with market like gains without market risk. And they're also eliminating advisory and portfolio fees. So we're getting more tax efficient, more fee efficient, but but also very importantly more market efficient, because we can really survive those really big valleys in the market. As you said at the front of this, you know, financial markets don't just go up. They can go. They go up and down. It's more like an EKG. Whereas if you invest in a fixed indexed annuities to replace your bonds, they that go up in stair steps. They never go down. They never retreat, they never backtrack. And so if you want to get market like gains without market risk, you also want to get a plan overall and you want to really grow your assets while also generating the income you need in retirement.

Speaker 3:
So you can really enjoy a successful retirement that's successful for you and accomplishes the goals you're setting for. That allows you to do the things you want to do and spend the time with the people you want to spend time with. Then I encourage you to go and reach out to us at 1-888-814-0304. That's (888) 814-0304. That's our toll free number. You can also visit us at retirement com forward slash plan. Submit your information your name, email and phone. We'll call you and get you and email you and get you started right away. Um you can also go to our workbook on either retirement com or Active Wealth com and get started. Just plug all your information. It's a 256 bit encrypted financial workbook. We don't want you ever emailing statements to us. We're here to protect your information. Um, but we want to get you started on the right way. The reason we do all this, $2,800 worth of financial planning on the front end with portfolio analysis, financial plans and strategic Roth conversions. We do all that on the front end to help you make an informed financial decision, because both Sam and I and Matt and other advisors are in our office.

Speaker 3:
We are all fiduciaries. We're here to put your needs ahead of our own, and we're here to make your retirement a complete and utter success. Um, at your definition, we want to deliver on what's important to you for your retirement. And again, we want to thank you, being with us during this short episode with retirement results. We're so glad you've been with us here. We're here today to make sure that we're talking about how to what is your plan going to do, what's your portfolio going to do and how will it handle losses if you don't feel like it's really battle tested for that. I encourage you to reach out to us at (888) 814-0304. Again, Tony Robbins says, if if you don't take action, you actually haven't made a decision. I'd encourage you to take action and really get control of your retirement future. Go ahead and reach out to us at (888) 814-0304. We'll take your call and look forward to talking with you and get started right away. On your $2,800 worth of free financial planning and portfolio analysis. Absolutely no cost to you. And we're also going to maximize that Social Security income benefit for you as well. And have a great week, everybody.

Speaker 2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's 77068517772. Connect with a qualified advisor to learn more about our mission and our team, visit retirement Results.com Investment Advisory Services offered through Brookstone Capital Management, LLC, a registered investment advisor and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Speaker 1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the ADV two, item four for additional information.

Speaker 6:
With news headlines about recessions flipping from imminent to unlikely almost weekly. A lot of individuals are left wondering, how do I prepare my money for whatever 2026 throws at us? I'm Jim Terubok here for the Retirement Radio Network powered by Amara Life. Recession talk is back for 2026. Not screaming from every headline, but lingering in the background with odds that aren't zero. And honestly, that's okay. The good news you don't need a crystal ball, you just need to be prepared. Her Money.com CEO, Jean Chatzky, outlines the signs to watch for when a recession is looming.

Speaker 7:
Keep an eye on unemployment. We'll look at consumer spending. Consumers often lose confidence. The tricky part about a recession is that we could be in one already and not know it.

Speaker 6:
Financial experts say the first step to being prepared is surprisingly simple get clear on what you actually need, not what fear is telling you. Start by building or topping off an emergency fund that covers 3 to 6 months of living expenses. Perhaps consider a high yield savings or money market account, so your safety net is actually growing. Next, pick a budgeting system you'll stick with, whether that's the old school envelope method, a spreadsheet, or even an app. And finally, how to configure your financial portfolio and investment strategy in uncertain times. Cnn's senior business writer Jean Shehadeh explains a key component.

Speaker 8:
You want to be really diversified in your portfolio. Meaning between stocks and bonds, between sectors of the economy. You can't predict what's going to do well and what's not going to do well. A diversified portfolio where you have some stocks, some bonds, they will perform differently.

Speaker 6:
Whether it's covering the basics, making easy cuts, redirecting that money to high interest debt. The people who come through economic uncertainty best aren't the ones who panic. They're the ones who plan calmly. Live a little bit below their means and keep investing anyway. A well-built budget doesn't just protect you from a recession, it gives you freedom no matter what the economy might do. Small steps now. Big piece of mind later for the retirement radio network powered by Amara Life. I'm Jim Teraoka.

Speaker 3:
Hi, this is Ford Stokes, chief financial advisor with retirement results. You've saved your whole life so you wouldn't have to worry about your money when you retired. But you worry now more than ever. You've been a good saver. You have 500,000, $1 million, or maybe even more. You should feel confident, but you don't. You're worried a big loss will wipe you out. You want to retire, but you don't. You're worried you don't have enough. Any of this sound familiar? It should, because we hear these things all the time from people just like you who are preparing for retirement or even already retired. So why do you worry so much? It's because you don't have an actual plan in writing. Nothing to guide you through retirement. Retirement results helps people just like you. You'll get a free, customized written retirement plan. That's right, free and no obligation. Schedule your meeting now at retirement. Com forward slash plan. That's retirement com forward slash.

Speaker 2:
Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor.

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