Navigating Volatile Markets: Two Strategies Kohl's Employees Can Use to Balance Growth and Protection

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'Kohl's employees who recognize the emotional impact of market swings and adopt strategies to balance growth with principal preservation can better position themselves for long-term financial health, rather than letting short-term fear drive critical decisions.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'Kohl's employees who combine disciplined strategies like anchor and protected accumulation approaches can help reduce the influence of loss aversion and support more consistent retirement outcomes over time.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

1. The impact of market volatility on investment behavior and long-term growth for Kohl's employees.

2. Two established strategies—anchor strategy and protected accumulation—for balancing growth and principal preservation.

3. Key considerations and practical tips for addressing loss aversion, including the role of diversification and liquidity in retirement portfolios.

In unpredictable markets, Kohl's employees can find balance between building wealth and managing losses.

Market volatility often triggers strong emotional responses, especially the fear of losing hard-earned savings. For Kohl's employees, it’s important to recognize that decisions made out of fear—such as selling off assets during market downturns—can have lasting negative effects. For instance, after the 2008–2009 financial crisis, many investors shifted large sums into cash and missed out on the long-term gains that followed, demonstrating how efforts to sidestep risk can inadvertently limit future growth.

Market swings are a constant, but impulsive reactions to short-term turbulence can disrupt even the most well-crafted investment plan. Maintaining some exposure to equities is essential for long-term growth, yet hesitancy due to risk aversion is common. As Wealth Enhancement advisor Wesley Boudreaux notes, this reluctance may hinder wealth building for Kohl's workers, particularly as inflation reduces the value of cash held on the sidelines.

The good news is that prioritizing both growth and limiting losses does not have to be an either/or proposition. Kohl's employees can use established strategies that help reduce downside risk while still participating in potential market gains.

Why Timing the Market Rarely Works

Attempting to “time the market” by guessing ups and downs is notoriously difficult, even for seasoned professionals. Missing just a few of the market’s strongest days can substantially cut long-term returns. According to Fidelity research, skipping the ten best days in a 20-year period could reduce overall gains by half. ¹  For Kohl's team members, fully stepping away from stocks could mean missing out on one of the best long-term tools for keeping up with inflation and meeting income needs throughout retirement.

Those with a time horizon of at least five to ten years may benefit from strategies that balance market participation with preservation of principal. The anchor strategy and protected accumulation approach are two practical methods Kohl's employees can consider.

Anchor Strategy: Building Stability Into Your Portfolio

This approach divides a retirement portfolio into two parts: a conservative “anchor” and a growth-focused section. The anchor portion often uses certificates of deposit (CDs) or single-premium deferred annuities (SPDAs) that offer fixed or consistent returns. For example, investing $82,200 in a five-year SPDA yielding 4.0% can mature to $100,000, ²  with the remaining funds allocated to stocks or equity funds for growth potential. The anchor provides the reassurance that the initial principal is restored at maturity, even if growth investments underperform.

For cautious Kohl's employees, this technique helps reduce the likelihood of losing initial investments. However, it’s important to remember that inflation can still erode purchasing power over time. Additionally, annuity or CD interest in taxable accounts may be subject to annual taxes, even though tax-deferred accounts offer certain benefits.

Protected Accumulation: Growth Potential Plus Principal Preservation 

This approach leverages certain deferred variable annuities—especially those with a Guaranteed Minimum Accumulation Benefit (GMAB) rider. Under this strategy, Kohl's employees may invest a higher percentage in equities, sometimes more than the 15–20% seen in anchor portfolios. The GMAB feature, for a fee, provides for the principal to be restored to at least the original investment after a set period, even if the market underperforms. ³

An additional advantage is the “step-up” option found in many GMAB riders. If your investments increase, you can reset your principal floor to the new higher value, locking in gains and beginning a new investment period. For example, if your Kohl's retirement portfolio with a GMAB rider grows from $100,000 to $110,000 in the first year, you can set $110,000 as your new principal floor. However, note that step-ups may result in higher fees, and annuity features vary among providers.

As with all financial tools, Kohl's employees should review terms, features, and costs carefully when considering annuities or other investment products.

What Kohl's Employees Should Consider When Addressing Loss Aversion

Choosing between these approaches depends on factors like your investment goals, interest rate environment, product fees, time horizon, and risk tolerance. While both strategies may help limit concerns about loss, they may also restrict the full potential of a diversified portfolio. Studies show that investors may experience greater long-term success with a balanced mix of stocks, bonds, and other assets. ⁴

Liquidity is another key factor for Kohl's staff. Both annuities and CDs often impose penalties for early withdrawal, which can eat into returns. The protected accumulation strategy may be less suitable for those with shorter investment horizons (under ten years).

Ultimately, psychology shapes investment decisions. For Kohl's employees, knowing that principal is preserved can make it easier to pursue growth opportunities without moving entirely out of equities.

Conclusion

While loss aversion is normal, it shouldn’t be the only driver of your investment choices. Kohl's employees are encouraged to weigh their personal goals, risk tolerance, and portfolio needs when considering protected accumulation or anchor strategies. Consulting with a financial professional can also help maintain proper diversification and tax efficiency. Careful planning allows Kohl's workers to navigate retirement savings through changing market conditions without letting fear dictate decisions.

Combining a ladder of bonds with dividend-paying stocks is another approach for Kohl's retirees to consider. Bond ladders can reduce interest rate risk and provide steady income, ⁵  while dividend equities offer both income and growth potential.

Managing your Kohl's retirement portfolio to balance growth and principal preservation is like preparing a ship for a long voyage: the protected accumulation approach serves as a reinforced hull, shielding you from rough waves, while the anchor strategy keeps your financial ship steady during storms. By using both strategies, Kohl's employees can confidently navigate market volatility while seeking new opportunities to grow their retirement savings.

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Sources:

1. Fidelity Investments. “ What high inflation and market volatility mean for retirees ,” Fidelity, n.d. Accessed 13 July 2025.

2. Fidelity Viewpoints. “ Fighting loss aversion: How to stay invested for growth ,” Fidelity, n.d. Accessed 13 July 2025.

3. Investopedia. “ Guaranteed Minimum Accumulation Benefit (GMAB), ” by Julia Kagan. July 25, 2024.

4. BlackRock. ' Diversifying investments .' Portfolio Construction Modules. 2025. 

5. Vanguard. “ Bond trading strategies: Ladders, barbells & swaps .” Vanguard, n.d. Accessed 13 July 2025.