A New Reality Calls for a New Approach

It's beyond doubt at this point...

This is the worst market upheaval since the 2008 global financial crisis.

But these two events are?not?the same.

Back then, we had a banking crisis.

But today's crisis is the result of a pandemic... and Washington's response.

After locking down the country... putting the economy into deep freeze... and shredding supply chains... they expanded the money supply by $7 trillion.

That's more new dollars than the 40-year period between 1960 and 2000.

Talk about trying to print your way out of a problem.

Now, inflation is at 8.8%.

And that doesn't include food and energy — where prices are spiraling.

Add to that a war in a part of Eurasia responsible for a major part of the world's calories (from wheat)... and also a significant portion of the world's energy... we're facing an unprecedented situation.

Everything about the economy right now comes back to one thing: Inflation.

It’s an economic problem. It’s a political problem. And right now, it’s a huge personal problem for your wealth.

You can see the massive increase in the chart below… And you don’t need a Ph.D. in economics to notice anything unusual…

The chart above shows the M1 money supply, the widest measure of money as calculated by the government. (It includes physical cash and cash equivalents like bank account balances.)

This explosion in money reflects the impact of the stimulus checks the government handed out like party favors during the pandemic.

It also includes extended unemployment benefits… forgivable loans to businesses to avoid layoffs… and the trillions of dollars that went to shore up the banking system over the past 30 months.

While we understand the need for government assistance during a pandemic, the massive stimulus spending came at a price…a dramatic loss in purchasing power.

For most Americans, it means they will see a gradual – and then sudden – decline in their quality of life. Families that could afford two new cars will have to do with one used car.

Young families that have yet to buy their first home could be priced out of the market for the balance of the decade. Families at the very lowest economic rung will face real financial hardship… forced to rely on the charity of friends, neighbors, and family.

Retirement dates will be postponed. Family vacations will become staycations. And many families will be forced to take on multiple jobs to make ends meet.

This was the reality of the 1970s and early ‘80s, and it’s already happening now.

Our New Financial Reality

Cash is the universal asset class because everyone needs it. And we like it because it provides optionality (choices).

Whether for an emergency, a bear-market buying opportunity, or something else, you?need?cash on hand.

But if you’re holding cash in a bank, you’ve earned little to no interest over the past decade.

While you might get a return in the 1–2% range due to rising rates… inflation means you’re losing purchasing power… Big time.

It’s a big reason life has gotten harder for many… even when the economy is doing well.

Then we get to bonds…

Bonds are a loan you make to a government or corporation. Over the past decade, these bond yields have barely outpaced inflation.

So with inflation now skyrocketing, bond yields no longer offer much protection. For instance, the 10-year Treasury currently has a 3% yield.

Would you lock up your money with Uncle Sam for 10 years at 2.8% if real inflation is running at 9% or higher?

No, because you’d still be losing purchasing power.

The bond market is where you’re supposed to go for safety when you retire. Instead, it can now cost you a retirement – and there’s no way to get ahead.

Next up is stocks…

When inflation is high, stocks generally don’t fare well. We can see this in the chart below, which compares the annualized inflation rate to the S&P 500 price-to-earnings (P/E) multiple. As inflation rises, stock valuations decrease.

When inflation is high, you need to be in very specific companies that have pricing power no matter where the market goes.

The point is, it doesn’t matter where you are in life. You’re losing out to inflation if you’re near retirement or are a retiree largely invested in cash, stocks, and bonds.

A New Reality

According to a Philadelphia Federal Reserve survey, economists predict an average inflation rate of 3.4% over the next five years…

That’s more than double the 1.5% average recorded five years before the pandemic.

And a report by Trading Economics found that most investors expect inflation to run above 6% over the next year.

So, economists and investors believe inflation will remain high in the short term.

What About You?

Do you have money sitting in the bank or bonds earning 0.nothing today?

Are you concerned about committing to a 5, 7 or 10 year surrender period?

Introducing the…

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This product has a potential upside of 8-10%, with no market downside risk; it’s completely liquid and has no surrender charges.

It also has a legacy benefit which can pay up to 1.5X whatever the client pays into it, if something happens to the contract owner.

Now, not everyone can qualify.

But if you do, it's ideally suited for people who want to get some of their money off the “market roller coaster” and don’t want market risk, but see the reality of inflation eating up their savings.

If you’d like to learn about this unique protected growth product - that few even know exists - then just click here to contact us. We will reply with details...no pressure...no sales talk...just an alternative you may never have heard about.