Bring On The Annuities

[sman]

Panties are just fine, but thanks for your concern.

sman,

Don't get your panties in a bunch. This is a discussion on Index Annuities vs the Market.

Now, if you have clients whom you've helped them get a positive return - FANTASTIC! You must do some things DIFFERENTLY than 95% of all other advisors out there!

Not all advisors are equipped, nor sell in a manner than can help their clients earn positive returns when the general market is not doing well.

As I had said before, without discretionary authority or a tactical asset allocation... it's hard for a Series 6 advisor to manage mutual funds this way. It's not profitable for them to call every single client to make an allocation change... so they don't.

We are all in business for ourselves. Our #1 job is to manage our time and resources to help us all earn a PROFIT. That's a profit TODAY and TOMORROW. Managing portfolios (on a non-fee basis) limits our profitability on our time.

If you can do it all and make a profit... again, that's great! You're one of the few. Hopefully, you're an RIA (I can't remember) so you can advise your clients on their 401(k) allocation as well.

BTW, if we were totally "against the market"... why would we have the interest linked to a market index?

I'm against LOSSES. I don't like losses, so I don't get them. I may not have the 100% gain... but I'll never lose what I put in or the interest that is credited every year.

What I like about annuities is that it's "set it and forget it". You review the account once a year with the client. No nervous phone calls, no nervous emails, no market losses. If the client doesn't want it... great! I hope they find an advisor like you, sman - who uses proper strategies to allocate their funds, minimize downside risks and capture upside swings of the market.

 

[Franz Kafka]

The point I was trying to make was that nothing goes up straight. We had 20 years of flat market, then 20 years of bull market, then 10 years of flat market. Periods of flat market are necessary to gather enough strength for the next bull market. I'm "betting" that we have at least another decade of flat market - likely longer considering the size of last bull market (83-2003). JMO

 

[sman]

You do realize you can make positive returns in a flat market don't you? If an index annuity is tied to the market and the market is flat, what do you get? At least in the market you have the luxury of dividends to provide growth even when the underlying stock is flat.

Also, the last bull market wasn't 1983-2003. The market was negative in 1990 (remember, we had a small recession from 90-91), barely positive in 1994 and EXTREMELY negative in 2000, 2001 and 2002.

The point I was trying to make was that nothing goes up straight. We had 20 years of flat market, then 20 years of bull market, then 10 years of flat market. Periods of flat market are necessary to gather enough strength for the next bull market. I'm "betting" that we have at least another decade of flat market - likely longer considering the size of last bull market (83-2003). JMO

 

[Franz Kafka]

Also, the last bull market wasn't 1983-2003. The market was negative in 1990 (remember, we had a small recession from 90-91), barely positive in 1994 and EXTREMELY negative in 2000, 2001 and 2002.

I was going to write something but decided not to due to the new year resolution of being a kinder and gentler Franz. Look up Dow Theory when you're bored. The best to you.

 

[0b1kanobee]

Depends how much of it is tied to the market. I don't tie everything to the market. You can allocate some to an interest bearing account. There are several ways to have positive returns in a flat market with an annuity.
What you keep forgetting unless you just don't know (because they are not your specialty) is that annuities were not designed for flat markets.
The main purpose of an annuity and they way I was taught and understand is that they are a great vehicle to make sure you never run out of money. As we continue to live longer, what is the number one fear, running out of money. That is what retires fear and also losing money. Annuities solve both rather effectively.

 

[sman]

Thanks for the education (sarcasm). I've been in the business for nearly 22 years and have sold plenty of annuities. I just choose to offer my prospective clients more choices than just an annuity. They can be a great part of any portfolio.

I really appreciate all you wise folks taking the time to educate me. I don't know how I've made it this long without the info provided in this thread.

Have a great weekend guys!

Depends how much of it is tied to the market. I don't tie everything to the market. You can allocate some to an interest bearing account. There are several ways to have positive returns in a flat market with an annuity.
What you keep forgetting unless you just don't know (because they are not your specialty) is that annuities were not designed for flat markets.
The main purpose of an annuity and they way I was taught and understand is that they are a great vehicle to make sure you never run out of money. As we continue to live longer, what is the number one fear, running out of money. That is what retires fear and also losing money. Annuities solve both rather effectively.

 

[0b1kanobee]

Thanks for the education (sarcasm). I've been in the business for nearly 22 years and have sold plenty of annuities. I just choose to offer my prospective clients more choices than just an annuity. They can be a great part of any portfolio.

I don't care how long you have been doing what you do. I'm only responding to your flat market statement and annuities are not sold for high returns but you know this.
I also offer clients other choices besides annuities. I refer them to one of the registered reps (one mainly) in my office. It's not something I care to be involved in right now.

 

[jacobtn]

Thanks for the education (sarcasm). I've been in the business for nearly 22 years and have sold plenty of annuities. I just choose to offer my prospective clients more choices than just an annuity. They can be a great part of any portfolio.

I really appreciate all you wise folks taking the time to educate me. I don't know how I've made it this long without the info provided in this thread.

Have a great weekend guys!

in other words, he knows everything... that's why he's on this board, reading threads... lol

 

[Fisher]

If an index annuity is tied to the market and the market is flat, what do you get?

Uhhhh, the minimum guaranteed return? What do I win...?

 

[sman]

Johnny, give that man a cigar.

Uhhhh, the minimum guaranteed return? What do I win...?