Safe Harbor Blog 

Welcome to my blog. Here you can find my views on the financial world and keep updated on the latest news.

Retirees Most Significant Risk!

Retirees Most Significant Risk!
The largest risk to a long term retirement income plan is suffering substantial portfolio losses during the first ten years of retirement.  This risk is known as sequence of returns risk.  Unfortunately, and contrary to popular belief, it is impossible to forecast how the stock market will perform this week or next month.  Nobel winning research shows there are correlating factors to gauge how the stock market may perform over the next eight to ten years.  This research is based on the stock markets valuation using the cyclically adjusted price earnings (CAPE) ratio. When the CAPE ratio is elevated then the stock market is considered expensive and can be expected to have an increased probability of adverse market conditions.  The current CAPE ratio has only been this high two other times in the history of the stock market.   Each time the U.S. stock market has hit this level the next ten years contained undesirable market conditions.   Retirees face a big problem if history repeats itself.  
 Avoiding losses in the first ten years is the highest priority to maintaining an income stream for 30+ years.  Due to past struggles in the economy, interest rates continue to stay very low.  Low-interest rates make it challenging to find viable solutions for safe investment vehicles to combat the sequence of returns risk.  Understanding where to find the highest potential return on safe investment options is imperative.  Safe Harbor Retirement Planners strategically allocates retirement portfolios to provide the optimal amount of safety paired with the highest potential returns.  Research paper such as Fixed Index Annuities: Consider the Alternative conducted by Roger Ibbotson helps with our analysis.   When you combine our strategically allocated portfolio along with our low fee structure, is what sets Safe Harbor Retirement Planners apart from the competition! 
Wishing you a Blissful and Prosperous Retirement!
-Eric Bowser
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The Financial world is littered with conflicts of interest.  Every week there is a new story where a financial advisor performs unethical acts to benefit himself and take advantage of the client. This is the unfortunate reality in the world we live in today.  The biggest reason clients choose a financial advisor is based on trust.  Safe Harbor Asset Management Services abides by the highest form of ethical standard required by law.  This is known as the Fiduciary standard. The Fiduciary standard simply states putting the client's interest before their own.  

Believe it or not but financial advisors are not created equal regarding the "ethical" standard they are required to follow.  This may be a surprise to you but is very true.  In fact, the majority of financial advisors are not required to act in the best interest of the client. You may be asking how can this be?  Most Advisors follow the Suitability standard.  If the investment is suitable for you than it's not against the law to sell.  Suitability relies on whether the investment fits your risk tolerance, diversification, and liquidity needs.  This may sound good but under the suitability standard advisors are not required to be transparent regarding fees and compensation methods.  Due to the lack of transparency advisors are more susceptible of choosing high-cost investments that will benefit himself and the firm he represents. Let's move on and find out how to tell if your advisor is a fiduciary. 

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