The Rule of 100
The Rule of 100 has been around for ages. It is a tried and true measure to hedge your risk exposure. There are two ways to use The Rule. One way is to subtract your current age from 100. The result is the maximum percentage amount of your investable assets you should place in risky investments (options, precious metals, stocks, bonds, real estate, etc.). The other (and more beneficial) way is to just take your age. That's the minimum percentage amount of investable assets that should be in low risk vehicles (savings, CD's, annuities, etc.).
So why is the Rule of 100 so important? Well from our personal experiences as professional advisors, no client of ours has ever been harmed by economic or market turmoil if they were practicing the Rule of 100. The Rule is meant to hedge a portfolio of assets according to the needs of your life. In fact with many of our clients, we practice a Rule + 10, which is a more conservative way to approach the normal risk hedge ratios.
Working through a Rule of 100 analysis with a client is extremely helpful. Most often we find that a client might have a risk tolerance of A, but in actuality, a risk exposure of Z. Our job as annuity risk hedge experts is to help close the gap between your risk tolerance and risk exposure...while not sacrificing growth.
Contact Us to request your free Rule of 100 analysis today!