When it comes to investing your retirement money no investment is completely without risk.

Still when markets get volatile people start to search for more secure options.

This can raise important questions:

  • What does it mean to go to cash?
  • When is it ok to pull my money out of the stock market?
  • Will bond funds keep my money safe?
  • Are there any hybrid type investments that offer security and growth together?

By the way, if you are getting close to retirement and have not checked out my FREE Retirement Video on How To Avoid Going Broke In Retirement While Securing Your Nest Egg, CLICK HERE NOW to watch it.

So, let us try and answer some of the above questions together.

What Does It Mean To Go To Cash?

Going to cash is industry jargon for moving money out of a stockholding and putting the money on the sidelines, often in a very low-risk money market type of account.

It does not mean to literally take your money out of your account, turn it into cash, dump it on the bed, and roll around naked in it. LOL.

For example, if you had the money in your IRA and you “went to cash” this means you sold off your stocks and are riding out the market on the sidelines in a money market account.

If you are worried about the stock market as you read this, you might be considering going to cash.

When Is It OK To Pull My Money Out Of The Stock Market?

 If you are working with a Stockbroker who is not a fiduciary the answer might be never!

If you want to see why I say that about stockbrokers you might want to check out my article on How Much Does It Cost To Work With A Financial Advisor where I go into detail about how an advisor gets paid can affect the advice you get.

When and if you pull money out of the market during volatile times depends much on your investment philosophy. Here are a few different ways you can go:

  • Buy and Hold
  • Hybrid
  • Tactical

Buy and Hold = This is where you buy a balanced portfolio of stocks and bonds and you hang on for all the ups and downs over time knowing investments tend to go up over long periods of time.

For most buy and hold investors the answer to when can I go to cash is never.

Buy and hold tends to work best for younger investors who have very long-time horizons and aggressive investors who can stomach lots of ups and downs.

Hybrid = A Hybrid investor is where you put some money into a buy and hold portfolio and the rest into something safe like a CD, Money Market, Savings Account, Fixed Annuity, ETC.

A Hybrid investor typically never needs to pull their money out of the market because they only put money in the market they can afford to wait for.

This works best for more moderate or conservative investors or those getting close to retirement.

Tactical = This is where you hire a money manager to ACTIVELY manage your money for you taking advantage of trends in the market and deciding for you when to be in or out of the market.

If you take a tactical approach you are relying on a professional money manager to decide if you should be in the market or not, thus freeing you up to think about other things.

This can also be a good approach for more moderate or conservative investors or those getting close to retirement although you can also build a more aggressive Tactical approach if you are so inclined.

 Will Bond Funds Keep My Money Safe?

You may have heard that Bonds keep your money safer than stocks. Yes, while most bonds are less volatile than stocks bonds CAN still lose money.

Unfortunately, some people mistakenly put 100% of their money into bonds thinking they have fortified their portfolio only to see big losses during uncertain economic situations.

One example of this is that bonds have an inverse relationship with interest rates. As interest rates go up the value of bonds goes down.

When interest rates are at all-time lows like they are right now bond funds can be problematic.

Also, the type of bonds you own can become an issue if you are seeking security.

I have seen many people who own High Yield bonds not realizing that High Yield can be another way of saying Junk Bonds or High-Risk Bonds sold to corporations that could have a difficult time paying those bonds back during economic hard times.

So, as you can see Bonds do not always equal security.

Are there any hybrid type investments that offer security and growth together?

Yes. Please watch this short video taken from my class that I teach on retirement. In the video, I talk about all of the investments under the sun in 7 minutes or less using an easy explanation that a 10-year-old can understand. Sound good? Check it out here…

If you like that video or this article and are getting close to retirement please check out my FREE retirement video, How To Avoid Going Broke In Retirement While Holding On To Your Nest Egg! CLICK HERE NOW


Disclosure: Investment Advisory Services offered through Retirement Wealth Advisors, LLC. (RWA) a Registered Investment Advisor. Rockford Retirement Planning, Inc. (RRP,Inc.) and RWA are not affiliated. Investing involves risk
including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment
advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

This information is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that RRP,Inc. and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any references to protection benefits or lifetime income generally refer to fixed insurance products. They do not refer, in any way to securities or investment advisory products or services. Fixed Insurance and Annuity product guarantees are subject to the claims
‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors, LLC.

Social Security/Government Program Disclosure: Antonio Filippone of Rockford Retirement Planning, Inc and Retirement Wealth Advisors, LLC are not affiliated with or endorsed by the Social Security Administration or any other government agency

MDRT Disclosure: The Million Dollar Round Table is a trade association to help insurance brokers and financial advisors establish best business practices and develop ethical and effective ways to increase client interest in financial products, specifically risk-based products like life insurance, disability, and long-term care. Annual qualification requirements include demonstrating a set annual production requirement and agreeing to a code of ethics but are not based on client experience or performance. For more information regarding the Million Dollar Round Table eligibility, please see
https://www.mdrt.org/membership/requirements/. Membership in no way constitutes an endorsement from Million Dollar Round table or any client.

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