Because of the high P/E ratio. (The P/E ratio is a valuation metric that gives a general idea of how a company’s stock is priced in comparison to its earnings per share. If you want to learn more about the P/E ratio CLICK HERE)

The long and short of it is, the P/E ratio WILL come back down. Meaning, the market will come down also.

But nobody knows when, which is why I don’t believe in ever selling and going away, like I mentioned in last week’s email.

So what should you do about it?

It is currently much cheaper than ever to install protection against market losses (in many cases it is free or you get paid to protect your portfolio).

In fact, it is the currently high interest rates that are causing this free/nearly free protection to be available.

You see, banks currently have the option to borrow money at, say, 5%, over, say, 5 years.

This is more expensive than any time in recent history.

This drives them to look for ways to borrow money in a less expensive way.

Currently, they can buy options against the market and offer you protection against losses, but with all of the upside of the market or more…. And it costs them less than 5% per year to do this.

So, they issue custom bonds instead of “traditional bonds”.

These custom bonds are called structured notes.

I know, I sound more like a structured note salesman rather than a fee-only fiduciary advisor.

But my fiduciary duty to my clients is precisely why I have been helping them find appropriate structured notes to protect at least part of their portfolio while continuing to participate fully in the market.

And no, I make no commission from selling structured notes.

There are several other ways to either protect yourself from market corrections and/or improve your returns, and/or improve tax bill, but if you have never taken a close look at structured notes, my fee-only, fiduciary advice is to take a look before interest rates go back down and this opportunity in structured notes goes away (the notes will be available but back to a form that is worth utilizing).

It’s time to start protecting yourself.

You now have a little more time to better diversify your portfolio.

Talk to your advisor about how you can protect your portfolio while the rates are still high.

P.S. If you are interested in structured notes, you can reply to this email and I can give you a rundown of what to look for.

We’d like to hear from you. Email us at jones@jonesfwm.com

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