Setting Yourself Up to Profit in a Volatile Year

Get ready for a rough year...

Last month, we talked about already seeing a bump in volatility. But, as we pointed out, volatility is still quite low. As I write, the CBOE Volatility Index (which we use to measure volatility in the markets) sits around 14.

So it might seem outlandish to expect high levels of volatility this year... But that's what we see happening.

For starters, it's an election year. We don't dabble in politics here in Health & Wealth Bulletin, but we do know elections bring a lot of division and uncertainty to the country. It doesn't matter which party you're supporting in this election... You're probably a little nervous about the results.

And folks are more and more uncertain about how the Federal Reserve will act when it comes to interest rates.

But it's not just uncertainty in the U.S.

Tensions are also rising around the world, especially in the Middle East.

Longtime readers know we don't like to make predictions about what will happen in the markets. We don't claim to know what stock prices will do in 2024, whether we'll see an up market or a down market. But we are fairly certain that 2024 will be a year of higher volatility.

And more volatility means investors will be more willing to pay higher prices for portfolio protection... like the options we sell in my Retirement Trader service.

Add everything up, and 2024 could be one of Retirement Trader's best years yet.

I consider selling options to be the best income-collecting strategy there is. It can even keep your portfolio safe from market drops, if you know what you're doing.

My team and I are currently on a 193-position winning streak selling options in Retirement Trader. And we don't plan on it ending anytime soon...

To learn more about how to set up your wealth to profit from volatility, click here to watch a short presentation on our options strategy.

Now, let's dig into the Q&A... As always, keep sending your comments, questions, and topic suggestions to [email protected]. My team and I really do read every e-mail.

Q: If BMI isn't any good, what about body composition? My scale measures it. Is this better than BMI? – G.D.

A: Thanks for your question, G.D. For folks wanting a reminder on why the body mass index ("BMI") isn't a great way to quantify your health, we covered it pretty extensively last year.

Essentially, the way BMI is calculated tends to skew the data to classify short people as thinner and tall people as fatter than they really are. You can read more here: "The Truth About Your BMI."

Some "smart" bathroom scales promise to measure your body composition with health metrics that can include body-fat percentage, muscle mass, and water weight.

These measurements – in theory – can be helpful if you're looking to keep track of the changes produced by your health and fitness efforts... But unless you have specific targets in mind (like lowering your body-fat percentage or increasing your muscle mass), then I'd say they're somewhat arbitrary.

What's more, these scales tend to be inaccurate when it comes to body composition...

In 2016, a Consumer Reports research team tested six digital scales – which measured weight and body-fat percentage – to see how accurate their measurements were. The scales ranged in price from $40 to $150, so you'd expect them to be accurate, given the price tag, right?

Well, not exactly...

The research team found that all six scales were off when it came to measuring body-fat percentage. In fact, the scale that came closest to the correct value was off by a whopping 21%.

They also found that many conditions tended to skew the results even further, like whether the participants' feet were wet or dry, and whether they had an artificial knee or hip, for example.

The technology hasn't improved since then. In its latest "Best Bathroom Scales," published in 2023, Consumer Reports said that none of its tested scales accurately identified folks' percentage of body fat.

So, as far as body-composition measurements are concerned, I say don't waste your time...

Instead, keep an eye on your waist circumference.

The reason waist size matters is visceral fat. The first layer of fat under your skin is subcutaneous fat (the fat you feel when you pinch your skin). Under that layer is the visceral fat – which wraps around your organs. Visceral fat builds as we age, when we eat fatty foods, or when we don't exercise.

The problem with visceral fat is that it triggers inflammatory responses and can interfere with our insulin functioning. That means it's a contributor to things like Type 2 diabetes and fatty liver disease.

Keep in mind, waist circumference – as well as your BMI and body-composition metrics – can't provide a full picture of your overall health. But if you're a numbers person like I am, measuring your waist circumference is the best way to gauge your shedding of visceral fat.

And if you want to learn how to accurately measure your waist circumference, don't forget to read our issue, "The Truth About Your BMI."

What We're Reading...

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
February 2, 2024