Alternative investment opportunities are redefining more traditional strategies. Why? The investment climate has been changing and evolving over the past few years and now especially, given the events of 2020, this evolutionary investment mindset is more prevalent than ever…and with good reason.
Investors are now taking advantage of more lucrative deals that offer enhanced flexibility, greater security and the potential for unprecedented portfolio growth. Paradyme’s Diversified Asset Fund, for example, is one such investment opportunity that has clients realizing significant returns while seriously calling into question the “status quo” bias in investing. Even those investors most resistant to change are increasingly seeing the light.
Let’s look at fixed annuities for example. Thought of by many as a relatively safe investment that guarantees income based upon what gets paid into the annuity, fixed annuities do have their drawbacks. Consider the following:
– Is your money truly safe? With something for instance like a real estate-backed asset fund, you have the peace of mind that comes with knowing your investment is secured by virtue of the equity in the real estate as well as by the fact that the fund is annually audited by the SEC. On the other hand, the safety of a fixed annuity is wholly dependent on the guarantee offered by the insurance company. What happens then if that insurer goes out of business or declares bankruptcy? While this may not be a common occurrence it can happen, thereby leaving the investor without access to any income from that annuity. In other words, they are out of luck.
– How liquid is your investment? A fixed annuity generally will allow you to withdraw 10% per year following the first anniversary for each year. If however you require more cash from this account, in the instance of an emergency for example, there are going to be penalties and surrender charges that apply. You are in essence being fined for accessing your own funds. With a fund such as that offered by Paradyme, there is full liquidity after five years with no additional charges involved.
– How profitable is your investment? It goes without saying that people invest in various funds, stocks, CDs, and annuities, what have you, because they want to make money; they want a measurable return on their investment. And yes, a fixed annuity does offer a return on investment, but is it maximizing your investment dollars? Consider the fact that given data collected over the past ten years, the average Fixed Indexed Annuity yielded less than 3% per year. The Diversified Asset Fund yields a much more lucrative 16% per year. Put into perspective: if an investor were to invest 100k in each of the above—a fixed annuity and Paradyme’s Diversified Asset Fund—after a ten year period, given the respective rates of return, the former would allow for a value of just over 134k. Paradyme’s Reg A fund, in light of its much more significant rate of return, would increase the value of that 100k investment to approximately 260k.
The world of investing is changing. From the way technology monumentally impacts investment strategies and behaviors to the types of alternative investments that are starting to dominate the playing field, financial firms and management companies need to take more innovative approaches in order to truly achieve the best results for their clients. This is Paradyme mindset!