The October jobs reports brought fresh news to the Fed that the country’s economy is getting back on track. The jobless rate in 2009 hit a high of close to 10% and since then has been steadily decreasing hitting a 7-year low of 5% as of the end of October 2015. Over 271,000 jobs were added in the month of October, which was considerably higher than expectations. Along with that, average hourly earnings climbed by the most since 2009. Phil Cannella has carefully examined and reviewed these numbers and points out that this type of report signifies that a rate increase is now more likely than ever in December, and the rate rise could have a huge impact on investors. The last 5 years of stock market growth was in large measure created by the Fed keeping interest rates so low that investors had nowhere else to go but to the stock market, hoping for some gains.
The financial tides are turning as Phil Cannella so astutely points out. When interest rates rise, investors begin changing their portfolio holdings which in turn increases market volatility. Investors get out of dividend paying stocks and move to other investments to get a potential return. Phil Cannella warns that people in and near retirement shouldn’t have to live with the unpredictability of the stock market in achieving their retirement goals. Once you leave the work force and enter the retirement phase of life you want some predictability; you want some certainty and you want peace of mind. That cannot be accomplished when there are forces outside of your control determining the destiny of your portfolio.
Phil Cannella created the proprietary Crash Proof Retirement System to take into account market volatility and eliminate it from a client’s portfolio while still providing a reasonable rate of return.