Annuities

About Annuities

Annuities Pros and Cons

Every financial product has a unique purpose. In the case of annuities (we use the term generically here), they have helped Americans with retirement income and security since 1790.

Questions regarding the merits or negatives about annuities have been discussed extensively in the financial media and journals. We as financial advisors are often asked about whether we think annuities are “good or bad.”

First, the question about whether annuities are “good or bad” is the wrong question. There are better questions that will bring out the benefits or negatives for you specifically.

Questions that can be asked are:

  • What is the primary function and use of the annuity in question?
  • What to expect if you convert to an income payout?
  • How is interest credited? What are the choices? What could you expect?
  • How do you exit the annuity? What would penalties be if you redeemed early?

This is a short list that should provide the general idea.

Annuities have two primary uses:

  1. Protection of principal with a guaranteed minimum rate of interest.
  2. A guaranteed stream of income for the life of the annuitant and, if applicable, a surviving spouse.

Annuities are insurance contracts, not investments. Guarantees are the fundamental benefit of annuities. No person has ever lost their principal in a fixed annuity contract in the U.S. since the first annuity was issued in 1790.

Our firm has a long history of investing and managing retirement funds and we also have a long history with insurance products and planning. Since we work for our clients, we keep an open mind to the strategies that will best serve their needs.

(Note that commissions are paid by the insurance company if we recommend and transact insurance on your behalf.)

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INVESTMENT PORTFOLIOS


All investment portfolios need to have priorities. These priorities are best defined by an honest appraisal by the investor and their advisor. What do you need your money to do for you? Time horizons, risk tolerance and individual preferences all must be considered.

Some investors want their accounts to grow and appreciate for their future. Some of our retired investors want a more income-oriented portfolio that distributes income with very low volatility. Others prefer a mix of the two approaches.

Whatever the priorities are, our firm can help those financial goals become reality.

DEFENSIVE GROWTH PORTFOLIOS

Objective: Capitalize on market volatility with optimal diversification to protect against loss.

Drawdown guidelines designed to protect principal using an active trading protocol, in which assets are monitored daily.

Sample Asset Classes:

·        U.S. Government Treasury Bonds
·        Precious Metals (Gold & Silver)
·        Managed Futures – Trade in liquid markets including Bonds, S&P 500, commodities & currency.

Goal:  to outperform over the rest of the current economic cycle.

CONSERVATIVE INCOME PORTFOLIOS

Objective: Invest in a diversified portfolio of assets and funds that can generate dividends, interest, or distributions.

Portfolio fund selection can be tailored to investor risk and volatility tolerance.

Sample Asset Classes:

·        Fixed Income / Bonds
·        Utilities
·        Infrastructure
·        Real Estate

Goal: to provide distributions consistently that may be used for income or re-invested.