Okay, sure, there’s the old adage: age is just a…..well, you know where it’s going.

That said, what’s the ideal age to pluck down cash on an annuity?

How about this for a little calculus: the age at which you invest in an annuity, coupled with your life expectancy, determines how much money you pocket from this monthly income over the course of your life, according to annuity.org. Your personal lifestyle, financial position and goals pinpoint the ideal age to invest in an annuity.

“It really kind of depends on the annuity investor, but I’d say that sweet spot is anywhere from 45 to 70 years old,” Joe Liekweg, a licensed agent at Insuractive told Annuity.org.

Most financial advisors are on the same page: 70-75 is the idyllic age to buy a fixed income annuity to get the biggest bang out of your payments while sidestepping tying an overabundance of your savings into the annuity, according to entrepreneur.com

According to annuity.org, among questions to bear in mind prior to purchasing an annuity:

1. When Will You Need the Money?
2. How Much Will It Cost?
3. What’s Your Life Expectancy?
4. What Are Your Risks?
5. Will the Annuity Work Well With Your Other Income?

Most investors would rather go to the dentist than take a look at their portfolios this year. 2022 has been a tough year for investors with both the equity and the fixed-income markets experiencing large drawdowns. Unless you’ve been all in on commodities this year, your portfolio has likely taken a hit.

This has been especially true for investors with large exposure to technology stocks. The Technology Select Sector SPDR ETF (XLK), which tracks the technology sector, is down 28% through October 21st. Out of the eleven SPDR Sector ETFs, only the Real Estate Select Sector SPDR ETF (XLRE) and the Communication Services Select Sector SPDR ETF (XLC) are down more.

But who could blame an investor for a large technology allocation, especially with the way tech stocks had been performing over the last five years? Even during the last major selloff at the beginning of the COVID pandemic, the technology sector held up better than most sectors. However, this year, tech stocks have been anything but strong performers.

It’s not just technology either, all sector leadership has changed considerably over the past twelve months. At the end of the third quarter last year, consumer cyclicals, technology, and financials, ranked first, second, and third in the DALI sector rankings, while utilities, energy, and consumer staples ranked in the bottom three.

Fast forward to the third quarter this year, and energy, consumer staples, and utilities held the top spots, while technology, consumer cyclicals, and financials ranked in the eighth, tenth, and fourth spots.

Looking at the period between September 30, 2021, and September 30, 2022, a hypothetical equal-weighted portfolio consisting of the top sectors in Q3 2021, the Technology Select Sector SPDR ETF (XLK), the Consumer Discretionary Select Sector SPDR ETF (XLY), and the Financial Select Sector SPDR ETF (XLF) would have lost 20.06%, underperforming the S&P 500 by almost 3.5%.

But an equal-weighted portfolio made up of the top sectors in Q3 2022, including the Energy Select Sector SPDR ETF (XLE), the Utilities Select Sector SPDR ETF (XLU), and the Consumer Staples Select Sector SPDR ETF (XLP) would have gained 12.58% over the same period, outperforming the S&P 500 by more than 29% and the previous portfolio by 30%.

That hypothetical difference of 30% reflects the cost of assuming that top sectors will remain at the top consistently. If instead, an investor followed a relative strength model and rotated with the market leaders, he or she would have likely been able to avoid those losses.

2022 is also notable as there is a nearly 80% year-to-date differential between the top-performing sector, the Energy Select Sector SPDR ETF (XLE), and the bottom-performing sector, the Communication Services Select Sector SPDR ETF (XLC), indicating that there is, even more, to be gained this year by picking the top sector and avoiding the worst.

The change in leadership and the large differential this year provides a useful reminder that long-term sector trends such as technology can change quickly and investors would benefit from the use of relative strength.

Tap into DALI sector rankings and access more investing tools with a 30 day free trial of Nasdaq Dorsey Wright’s Research Platform.

Due to their difficult to resist growth potential, many investors rock on small cap stocks – less than $1 billion market cap, according to talkmarkets.com.

Thing is, because of their volatility, which translates into factors such as a stepped up risk of bankruptcy, the stocks are surrounded by less than favorable sentiment. While a valid point of view, the perspective, seemingly, is at least a tad overblown. Over the long run, numerous small caps hit pay dirt.

That said, due to sometimes daunting wild swings in pricing, like a bad date, compatibility among  conservative investors and small caps might be zilch. Some apps, y’know…

Meantime, what do factors such as the Ukraine war, escalating oil prices and interest rates sending U.S. equity markets into the blender this year add up to? Why, greater volatility, of course.

And compared to their large cap counterparts, there’s this, well, thing, about U.S. small stocks compared to their large cap counterparts: greater risk, according to oakfunds.com. While it might seem somewhat, well, illogical to propose ratcheting up the allocation of small cap stocks into your portfolio, it might serve as a buffer against these tumultuous times and offset harrowing times that could be linked with large cap stocks. 

Direct indexing: you’re on.

While ETFs still have their place, the benefits of direct indexing are more than finding traction, according to Finance.Yahoo. 

Want to create a portfolio up to the task of performing on a par with – or exceeding the performance – of the popular S&P 500 index? Direct indexing’s all over it.

Index funds and ETFs are well and good, but direct indexing also means greater control over fund holding and the potential to outperform, according to Schwab. 

Spurred by technological strides that induced investment minimums south, direct indexing – once limited to institutional and high net worth investors – now can sit comfortably in the backyard of a wider swath of investors.

The latest wave of innovation and direct indexing are going hand in hand. Those advances include commission free trading and traditional shares, yielding greater alternatives and control to investors.

"Allowing for personalization makes direct indexing a great fit for those who generally like low-cost passive strategies but are also looking to potentially outperform the index on both before-tax and after-tax basis, or have more flexibility in terms of what they own," said Nitin Barve, CFA, director of Portfolio Analysis and Advice Tools & Policy at the Schwab Center for Financial Research.

According to a recent survey by Broadridge Financial Solutions, 67% of financial advisers are using alternative investments such as real estate investment trusts and private funds, compared to 59% in a previous survey taken earlier in the year. Of the 400 advisors surveyed by Broadridge, more than half said they plan to increase the use of alternatives over the next two years over traditional assets such as stocks and bonds. However, the advisers also noted their disappointment in the available offerings, with just 27% saying they are very satisfied with the options available from asset managers. Among the issues leading to this disappointment are too few choices, too much paperwork, and compliance and regulatory concerns. As per the reason for the increased interest in alternatives, advisers cited diversification, followed by non-correlation with equities. According to the survey, the alternatives that advisors were most interested in were REITs, commodities, private equity, hedge funds, and private debt.

Finsum: With investors concerned over steep portfolio losses, advisors are showing an increased interest in alternatives such as REITs, commodities, private equity, hedge funds, and private debt.