China’s Catastrophic Market Crash is Creating a Domino Effect Around The World… Avoid Its Line of Fire Before it Reaches YOU

It is no secret that investing in the stock market is a risky game to play. You are gambling with every second that your money is exposed to the volatility of the market.

That was proven on Monday when the Dow Jones saw its biggest drop since August 2011, with a 588-point decline.1

If you’ve read any of my past blogs or listened to my radio show, you know that I am NOT opposed to people investing in the stock market. I don’t feel that people should completely stay away from investing in the stock market in retirement. I just have strong opinions on how I believe people should go about it, especially when it comes to retirement (I’ll touch more on that in a minute).

It has been a while since we’ve seen this degree of chaos and panic surrounding the markets, and it started when China’s Shanghai Composite index dropped 8.5%. As of August 25, 2015, the index was down 42% from its June peak, and it seems to only be going downhill.2

These catastrophic declines aren’t only causing chaos for China’s markets.

It is creating an equally dramatic effect for Wall Street, as well, with a number of American stock prices plummeting at a rapid rate.

These include some of America’s largest and well-known companies, such as General Electric and Pepsi—each with shares that have fallen more than 20%—and Costco, which saw a 15% decline.

What does this all mean to you?

Well, for starters, the poor health of China’s economy has caused America’s S&P 500 to enter correction mode, meaning it has reached a 10% decline. When the markets enter correction mode, the bull is one step closer to transforming into a bear, thus putting us on the one-way path heading straight for a recession.

This isn’t always the case with a market correction, but do you really want to risk finding out? So many people, including FAR too many retirees, have lost money with the recent market drops.

Those retirees who were planning their 2016 winter getaway are probably now being forced to put those plans on hold. With the amount of income they’ve lost in the blink of an eye, I can’t imagine they are planning much of anything, other than how to make up for those losses.

That’s the problem, though… In retirement, it is much harder to make up for market losses than it is when you are still in your working years earning a steady income. In the latter scenario, you have the time and money to make up for any potential stock market losses.

To go back to my earlier point, that is the very reason why I have such strong opinions on how I think people who are retired should go about investing their money in the market. I am all for putting some money into the stock market in the right situation.

In the right situation, the potential reward is worth the risk.

However, in retirement, it is only worth the risk if you set it up to be worth it. That part is up to you.

You have the option to create a plan that will give you guaranteed income, which will be 100% guarded from the woes of the stock market, for the rest of your life.

In fact, creating a plan like this can do much more:

  • You will receive a guaranteed cash flow stream that will last for the rest of your (and your spouse’s) life.
  • This guaranteed income stream can INCREASE with market gains, but will never decrease with market downturns.
  • The balance on some of these accounts can grow at increased rates, compared to the interest rate growth on more traditional products, such as CD’s.
  • The companies offering accounts like this have multiple safety nets in place, so that your money is completely secure and protected 100% of the time.
  • You have the option to attach extra features to your product, which will provide additional benefits.

At the end of the day, the most important thing to remember is that nobody is immune to market crashes like the one we are experiencing right now. It doesn’t matter how much money you have… You will lose a potentially huge portion of income when the market decides to take a dip. The most alarming part about it is that it can literally happen overnight with very little warning.

Have you ever heard the funny saying about cats, “it’s a cats world and you’re just living in it”? If you’ve ever met a cat, you know where that saying comes from; they make the rules and they usually run the house. Everything is on their terms.

Well, in the world of money, it’s Wall Street’s world and your money is just living in it.

If it decides it wants to plummet, it will take your money right down with it.

So, rather than letting Wall Street completely deplete you and steal your income when it crashes (like it has for many this past week), why don’t you set it up so that you can get the best of both worlds? Who wouldn’t want to do that if given the option, especially in retirement?

When I say “best of both worlds,” I mean creating an opportunity for yourself where you can participate in the uncapped gains from the stock market, while still receiving a guaranteed income from a safe place?

I call it creating your “floor” and “upside.” There is no one, single way to go about doing this. That’s part of its appeal… It’s completely customized to fit you and your situation. Your “floor” and “upside” strategy may look very different than someone else’s.

But the bottom line is the same for everyone: to create a unique opportunity that makes it safe to potentially lose money to the stock market. Yes, you read that correctly… There IS a way you can safely lose money.

Of course losing money isn’t ideal in any situation, but the reward is worth the risk if it’s done correctly.

This begins with protecting a portion of your money, which will provide you with an income that allows you to comfortably live the retirement lifestyle you want for the rest of your life.

Since the recent market volatility, I’ve received many calls from people who have lost a painful amount of money. Once I showed them how their current advisor should have set things up, every single one of those people said they wished they would have known about this beforehand.

Needless to say, they are now fully protected, prepared, and equipped for the next market crash. And, trust me, there will be another. There always is. Don’t let your money get caught in the trenches of it, like so many have this time around.