3 Ways You Can Profit from Stock Market Turmoil

Originally published: June 27, 2022

Updated: August 13, 2026

Every challenge is an opportunity. The significant volatility in financial markets so far this year is no exception. Here are three things that every middle-class American can do with their 401(k), IRA or other retirement plans, right now, to take advantage of what's going on.

1. Move Some of Your Money Into a Fixed Index Annuity

Retirement accounts, such as 401k's, IRA's, 403B's, and Thrift Savings Plans (TSP) are all taking a hit this year due to market volatility. As of mid-June 2022, major stock indexes like the S&P 500 have fallen over 20%, while other asset classes such as international developed markets and U.S. small-cap stocks saw declines as well.

When this does happen, and individuals start looking for safer strategies in their portfolio, there is a trend of consumers moving money into bonds. We have, of course, seen this occurring steadily during Q1 and Q2 2022. Unfortunately, due to changes in the Federal Reserve that are also occurring this year to offset inflation, the bond market experienced a significant decline in price, with longer-term Treasury bonds seeing even steeper losses. This means, bonds are not a safer approach and can actually open you up to a more immediate risk in some cases.

There is one “safe” approach for consumers who want to continue to grow their money when the US stock market is doing well but who do not want to keep losing during a Bear Market, like we are experiencing today. That approach is called a Fixed Index Annuity.

Not only can you roll over your employer sponsored retirement account and/or your individual retirement account into a Fixed Index Annuity, but you can often receive a policy bonus up front when you do so. Here's what that would look like:

• A qualified, trustee-to-trustee transfer of funds can generally avoid triggering current taxation, though this depends on your account type and how the transfer is structured — a tax professional can confirm your specific situation.
• Your bonus is credited day one to help offset losses experienced year to date in your previous account.
• Your principal and the bonus will be immediately protected from market declines, subject to the terms of the contract and the claims-paying ability of the issuing insurance company.
• Your principal and the bonus may earn compounded interest year over year, with the potential to grow at a competitive rate over time, depending on index performance and contract terms.

Because Fixed Index Annuities grow based upon a specific market index, like the S&P 500 for example, when that index is doing well you may earn interest based on that index's performance, subject to the contract's cap, participation rate, or spread. And, in years where that particular index is not doing well, your values are protected by the insurance company, subject to the terms of the contract and the claims-paying ability of the issuer. These accounts are specifically designed to help consumers protect the savings they have during down markets while still offering interest growth potential over time.

2. Rebalance Your “At Risk” Investments

Moving some of your portfolio into a conservative money strategy like a Fixed Index Annuity would be step one to achieving diversification in your portfolio, but the next question would be- what to do with the funds that you choose to continue to keep in an at-risk financial environment. Rebalancing market-exposed investments — like stocks, bonds, and mutual funds — is available through Summerlin Benefits Consulting's affiliated advisory firm, SBC Wealth Management.

There's some good news hidden in a broad-based selloff: pretty much everything has gone down. So, if you came into the 2022 calendar year owning, say, too much in large company U.S. stocks, and too little in smaller company stocks, foreign stocks, real-estate investment trusts, etc. this could be a good opportunity for a do-over. Rebalancing assets now could be conducted at little to no cost, since pretty much everything (except commodities and energy stocks) is down.



It's not perfect of course, because things have fallen different amounts and will likely continue to lose value for a while longer. But, in today's economy, transitioning to a more conservative approach and taking advantage of lower costs along the way can often make good sense.

3. Create Legacy Funds for Your Children or Grandchildren

One simple way to take advantage of this market downturn is to use the timing to set up that legacy fund that you've been wanting to establish for your children or grandchildren.

Opening a new savings or investment account for minor children in 2022 and depositing as little as $5,000 or even $1,000 on their behalf into some low-cost index funds could be a good way to leave a little bit of money behind for your loved ones that is pretty well positioned for positive growth from here on out. The long-term returns from the stock market averaged about a 5.5% compounding interest over the last 20 years, as have accounts like Fixed Index Annuities which tend to average somewhere between 3-6% compounded interest over time. Based on those numbers, a $5,000 gift today could be worth as much as $14,588 in 20 years' time.

Again, every challenge is an opportunity to reevaluate your strategies and take action towards positive change.

At Summerlin Benefits Consulting, we help clients follow a simple 3-tiered approach in deciding their course of action during times like this. Always ask yourself if the strategy you are taking is: (1) Good for Me Now. (2) Good For Me Later. (3) Good For My Family When I'm Gone.

Important Tax and Legal Information

Note: This content is for informational purposes only and does not constitute tax or legal advice. Summerlin Benefits Consulting does not provide social security, specific advice related to taxes, or legal advice. Consult a tax/legal professional for guidance with your individual situation.

Important Retirement Planning Information

Every retirement strategy is unique, and not all annuity products offer the same features, guarantees, or level of protection. References in this article apply only to the specific retirement solutions discussed and should not be interpreted as applying to all annuities. The right strategy depends on your individual goals, financial situation, and retirement objectives. This is something Summerlin Benefits Consulting can help you determine.