Can Investments Be Guaranteed Against Loss ?

Roadrunner45 · Jan 14, 2020

You should research as much as you can these risks. If you feel that you want help from a financial expert it is recommended to find a "fee only financial planner". You pay a lump sum to this person to help you, as opposed to them taking a cut of your investment portfolio (which is regardless of performance).
I've had an investment advisor take their cut of my portfolio before. It REALLY SUCKS when they take their 1% (typical) fee on years where your portfolio loses money in the market.

SlugSlinger · Jan 14, 2020

SMS said:
Interest is based, in part, on risk. A truly risk free investment would pay little interest.

This is exactly correct. A good example is a savings account or cd.

There is also more to risk than losing dollars in the stock market. You can also lose money, ie purchasing power when you put your money in the bank earning less interest than the rate of inflation.

An example: a dollar is deposited into a savings account. The day you made the deposit, that dollar could buy a gallon of milk. A year later, say you earned 1% on the dollar. You now have $1.01. However a gallon of milk is now $1.10. You have lost money, effectively ~9%, in the way of purchasing power.

Investing in the broad stock market, like an index fund, essentially covers the risk of losing purchasing power. However there is additional opportunity, risk and volatility that comes to bear in the stock market.

k4ylr · Jan 14, 2020

I feel like all of these suggestions are missing the point where you said you just retired but are also looking to invest. There's a lot to unpack with that statement because at face value you are way behind and a traditional investment scheme isn't necessarily the best option.

Are you moving investments from an employer sponsored plan?
What's your income right now? Pension, SSI or other source of fixed income
Are you of retirement age or have you retired early?

Some fund managers might lever (and inverse lever) to protect against large swings but those are infrequent and not usually advertised at first. There's always risk involved with investing; it's usually the first sentence of every financial advice book ever. I would take any "guarantee against loss" from a company that makes money, on your money with a huge grain of salt.

If you feel you need full blown financial advice, I'd echo the sentiments of finding a fee only adviser to help direct your investments. If you feel like going solo I use Vanguard to manage several investment accounts and they are a great option with free trades, low fees and lots of help.

Depending on how you answered the above questions, your best bet is a fixed income vehicle like an annuity, high yield savings or a relatively safe high dividend ETF.

JD8 · Jan 14, 2020

CHenry said:
Never invest in single stocks.

Speak for yourself LOL.

MacFromOK · Jan 14, 2020

From what I understand, guarantee against loss of principle is fairly common.

Guarantee against loss of interest... not so much.
:drunk2:

JD8 · Jan 14, 2020

Profreedomokie said:
I just retired and have been talking to several investment companies about investing with one of them. One company claims that your money is guaranteed against loss with them no matter what the market does. They say they insure your money and what it makes against loss. Is this possible?

I'm going to second what Glockpride relayed, only true way to guarantee no losses is an annuity product or cash and there are 10 bad ones for every good one when it comes to annuities. I don't recommend them for a nest egg. They should be used as a backup. If someone is pitching these, make sure they show you the worst case prospectus.

k4ylr · Jan 14, 2020

JD8 said:
Speak for yourself LOL.

TSLA and AMD options gonna be paying for the next safe queens.

CHenry · Jan 14, 2020

JD8 said:
Speak for yourself LOL.

I mean if he wants to reduce risk a lot. I'm not against them for play money but my retirement will stay in mutual fund. No annuities or EFT (I do not know much about EFTs so I need to research and see if I'm missing out on something)

JD8 · Jan 14, 2020

k4ylr said:
TSLA and AMD options gonna be paying for the next safe queens.

Bless you on those TSLA options..... I don't have the stomach LOL. I'm being very conservative and taking gains and putting it in vanilla stuff. I say that though and I just bought a few biotech stocks.

JD8 · Jan 14, 2020

CHenry said:
I mean if he wants to reduce risk a lot. I'm not against them for play money but my retirement will stay in mutual fund. No annuities or EFT (I do not know much about EFTs so I need to research and see if I'm missing out on something)

ETFs are a good option if you do NOT want to pick single stocks but like a specific sector. Highly recommend them to those willing to do the homework. Hell, I put my mom in QQQ among many others and it just trucks along.

Can Investments Be Guaranteed Against Loss ?

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