Could Terrorism Strike Your Nest Egg?

Readers from all across America have contacted me because theyre afraid of the impact a terrorist event could have on their nest egg. Theyre losing sleep because theyre afraid that theyll wake up one morning to discover another deadly attack has struck American soil, sending the markets into a downward spiral and evaporating their lifes savings. Their concerns are valid. Guarding Your Wealth" is a nationally syndicated weekly personal finance column written by Jeffrey D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group, a private wealth management firm that employs sophisticated proprietary strategies designed to protect and grow its clients' investments. Please visit our website, www.guardingyourwealth.com to read past articles in our archive.

(PRWEB) June 14, 2004 -- Readers from all across America have contacted me because theyre afraid of the impact a terrorist event could have on their nest egg. Theyre losing sleep because theyre afraid that theyll wake up one morning to discover another deadly attack has struck American soil, sending the markets into a downward spiral and evaporating their lifes savings. Their concerns are valid.

The good news is it doesnt have to be this way! You shouldnt be losing sleep over your money. Youve worked hard to accumulate your wealth and you shouldnt have to white-knuckle your way through retirement.

Wisely choosing the investments in your portfolio, having a plan of action in place, and working with the right advisor will help to put your mind at ease. Unfortunately, few advisors have changed their approach to investing to better protect their clients.

What would likely happen to various investments if we suffer another domestic terrorist attack? Initially, trading would be halted. Once reopened, thered be a sharp sell-off in stock-based investments. Losses of 10, 20, or 30% could be possible. Thered be a flight to quality with traders and investors selling stocks and buying government bonds.

It could take days, weeks, months, or even years for the markets to recover depending on the severity and nature of the attack. Certain sectors would be hit harder than others. For instance, after 9/11, airline, travel and insurance company stocks were hit very hard. Attacks could disrupt normal economic cycles, result in greater unemployment and drastically increase the cost of living.

How can you reduce your risk? First, work with an advisor that has a specific plan of action and systems in place to help protect your money. If an event happens you wont have time to thoughtfully consider your actions and you may not be able to reach your advisor. If your advisor has to manually adjust your portfolio then it may be too late. I have a pre-defined action plan for my clients.

Secondly, you must be able to rapidly access and move all of your money--not just a small portion of it. The investments you use today will determine your flexibility tomorrow. Stay away from high-commission products and ones that carry surrender fees like annuities.

Third, make sure you arent too heavily weighted in investments that cant be quickly sold. For instance, traditional mutual funds can only be sold at the end of the trading day. Thats why I keep about half of my clients money in Exchange Traded Funds (ETFs). ETFs mimic the major indexes such as the S&P 500 but can be sold throughout the day at a moments notice like individual stocks. This means we can quickly move their money to safety at a moments notice.

Lastly, work with an advisor who actively manages your portfolio. If youre retired or near-retirement your priority should be keeping what youve worked so hard to acquire and there are times that you will sleep better NOT being exposed to the market. Make sure you are using an advisor that understands that.

Some of my clients currently have as much as 80% of their portfolios in cash or investments that dont fluctuate in value. As current risks subside we can easily increase their market exposure. They may miss a little growth in the meantime, but their comfort and peace of mind is more important. And so is yours.

If youre not comfortable with your current portfolio and your advisor isnt listening to your concerns, fire them and find a new one! Stay away from advisors that push packaged products like annuities or load mutual funds.

Find an advisor who will listen to you and actively manage your money. There are advisors who will closely watch your portfolio and be ready to respond should catastrophic events rattle the markets. Theyll listen to your concerns and invest your nest egg accordingly without subjecting you to massive commissions or onerous surrender fees to do it.

So put away the Rolaids and finally get a good nights rest. By staying flexible and finding an advisor youre comfortable with, you can stop letting the threat of terrorism steal your peace of mind.

If youd like free, clear, unbiased advice send your questions to jeff@guardingyourwealth.com.

Mr. Voudrie is a Certified Financial Planner, nationally syndicated newspaper columnist and President of Legacy Planning Group, Inc., a Private Wealth Management Firm in Johnson City, TN. He can be reached toll-free at 1-877-827-1463 or at jeff@guardingyourwealth.com

Looking for an energetic expert who is passionate about financial and wealth management? Mr. Voudrie is an excellent speaker who will excite and inspire your audience. Mr. Voudrie is available for a limited number of speaking engagements, television appearances and radio talk shows. For booking information, contact Christine Lavender at (877) 827-1463 or email christine@guardingyourwealth.com.

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