stock market averages today
An alternative to investing in the stock market, especially in times of exceptional volatility in a fixed index annuity (FIA), a hybrid between a fixed annuity and variable for long-term growth.
What is an annuity?
An annuity is an insurance product offered through insurance company that grows tax-deferred over time and can provide a lifetime income in retirement.
The benefit of an annuity of is that fixed rate annuities are fixed, which means that the principal is guaranteed and there is no guaranteed minimum rate of return on these types of accounts.
The "index" is partly because the annual returns are based in part on increasing the prices of a specified stock index (excluding dividends), such as the S & P 500. When the market goes up, a portion of earnings on an annual basis to a "cap"-say 5 to 10%, are blocked and credited interest. When the market goes down, no loss is recorded in the account.
The reason for this income effect for planning retirement is that account balances can never go back. This means that the market may go up, down or sideways, and only the earnings are credited. Moreover, some of these leases have drivers who can create a guaranteed income for life.
The investment landscape has changed.
The latter credit crisis has shown some interesting facts:
– 1 In order for an investor to accurately assess the risk, you must know all material facts relevant to an investment. This is impossible when there is systematic disinformation broad or undisclosed information, resulting in mispricing Gross risk. A good example is the mis-rating of securities backed by mortgages, Moody's and Standard & Poors.
– 2nd economic advisers of our government and corporate institutions were surprised that this crisis occurred. If they can not predict the future of economic phenomena on the base of the mountains data and knowledge at their disposal, how can an average investor has any idea what to do? The truth is that it is impossible to know all the correct data needed to navigate successfully in the global market-wide investment in the long run, not to mention the long-term effects of arbitrary government fiscal and monetary policy.
– 3rd Investment costs in the market through investment funds, the most popular form of investment are very high. When all costs are included as portfolio management and trading costs to name a few, the costs can easily exceed 3% in active market funds.
– 4 professional investors both amateur and many are sold when the market is down and buy more during periods of market bubbles. Empirical evidence has shown that people react irrationally under threat of loss and in fact sold out at the bottom of a market in order to "avoid further losses.
How long does it take to make a loss?
If an investment has lost 40% then the percentage of how much performance be back soon enough? 40%? Nope. 66%.
The percentage returns are based on smaller numbers and therefore take more risk performance (and therefore more) to get back to par.
Some of these innovations in the insurance industry offers attractive options for the average investor. Companies insurance do one thing very well manage risk.
Today there is more risk in investment markets than ever before because of the propaganda, opinion authorized and fraud.
Why put at risk?
Why put in a position where they are affected by the roller coaster market volatility?
How important is the peace of mind that your account will not lose a penny when the stock loses half its value?
Booms and busts are part of the investment game, but I imagine that the average investor has enough to worry about instead of worrying about losses in their savings.
If you feel that it’s time to review your investment strategy, maybe it’s time to do something about it. Christopher Music has helped many professionals gain control over their finances and achieve financial freedom — or at least move steadily in that direction. For more information on investment strategies and concepts, visit Christopher’s website at http://www.wealthadvisoryassociates.com.
Wealth Advisory Associates, LLC is a Florida Registered Investment Advisory Firm.
Wealth Advisory Associates only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements.
Stock Market Video Update 10/16/08 – As The Volatility Continues
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