City Lifestyle

Want to start a publication?

Learn More

Featured Article

Principal-Protected Investments to Combat Inflation and Market Volatility

Principal-Protected Investments, Like Fixed Indexed Annuities, Could Serve Investors Well During Potentially Turbulent Times in 2023

Concerns about rising inflation and interest rates, among other global factors, might have you feeling uncertain about how and where to keep your money safe in 2023. Thankfully, there are lesser-known investments that can decrease risk at the same time as increasing the reward to safely grow your money.

As financial advisors, we are constantly tracking the markets and evaluating the product landscape to ensure they are building the best possible strategies for our clients. This is especially true in the current market environment with high inflation and market volatility. Fixed-indexed annuities are an example of a product that has benefited significantly from the recent rise in interest rates, and are a great option to help diversify your portfolio to protect against risk in 2023.

Portfolio Diversification
Having a diversified investment strategy is more important than ever in an environment with high inflation and market volatility. By investing both in the stock market and in other alternatives, you get the diversification you need to weather a market downturn. Every type of investment has benefits and risks, depending on market conditions. Inflation will catch up with you if you pull money out of the market, while investing everything in a down market may also just compound your losses. 

For the first time since the Great Recession, investors with a lot of cash are sitting on the sidelines. They are nervous, for completely understandable reasons. In a low inflationary environment, sitting on the sidelines in cash may work, but with inflation rates around 7%, it is incredibly valuable to find alternative means to grow and preserve your wealth. One key to retirement planning is making sure your dollar is appreciating.

Fixed Indexed Annuities
Fixed Indexed Annuities have been around since the 1990s and are becoming an increasingly useful part of an investment portfolio during these high inflation times. FIAs provide principal protection and upside potential. 

While the stock market historically goes up over the long term, we know from the last few years that it may be a bumpy ride along the way. Using a fixed indexed annuity to mitigate against market swings may be a solution to consider for a portion of your portfolio as you approach retirement or are in retirement.

FIAs also benefit from tax deferral when purchased in a taxable account. Taxes are an increasingly important consideration in a higher bond yield environment, especially among more conservative investments, like bonds, that typically have unfavorable taxation (all gains are realized annually and taxed at ordinary income levels).

While you are not guaranteed to make money, you will also not lose money due to stock market or index losses in a fixed-indexed annuity. Diversification is the key to any successful financial plan, whether you are investing for the short or long term. 

Each investment has its own unique benefits, but the beginning of a new year is a great time to sit down with an experienced financial adviser, revisit your investment strategy and find out what combination works best for you.

For more information about these principal-protection strategies, feel free to reach out.
Your Impact Wealth Team
(303) 645-4800 or

“Invest for the long haul. Don’t get too greedy and don’t get too scared.” ~Shelby M.C. Davis | Philanthropist and Money Manager