It may seem like an easy decision for your clients to invest in guaranteed return investments when rates are high, but it’s important not to lose sight of inflation. The objective, after all, is to increase purchasing power through earning at a rate higher than inflation. If inflation is, say, 5% but interest rates are also 5% then the real interest rate is 0% and there is no increase in purchasing power. Increasing purchasing power can often involve taking on some level of risk.
Your clients may benefit from exploring the value of taking risks with different types of investments that offer varying risk profiles or tax treatment.
Try the tools in The Value of Taking Risks and share them with your clients to help them learn more about the value of taking risks, and get the conversation started.