James K. Noble, CFP® CLU® AIF®
Nationwide Planning Associates, Inc.
One of the greatest challenges for investors in the wake of the Great Recession is how to invest safely for income in a zero interest rate environment. Since 2009 we have seen rates fall in what has been described in the financial media as "Financial Repression", and the "Saver's Penalty". In the past, an investor approaching retirement had a fairly easy path to achieving a fair and reasonable rate of return with conventional income investments such as savings accounts, money market funds, CD's insured by the FDIC, or bonds.
Today these familiar tools for financial planners and their clients now yield barely the rate of inflation unless we commit funds for a very long period of time or take on investments that may not have experienced a rising rate environment. After all, interest rates have been falling for over 30 years and some investments don't have that track record to compare.
The goal of an income investor is to achieve an income that exceeds the rate of inflation. The goal of the advisor is to select the investments that are most likely to achieve the client's goals. An advisor who acts as a Fiduciary for their client will always put the client's needs first, and select only the most suitable investments based on the investor's individual risk tolerance, age, goals, assets and liabilities.