Index annuities were designed in 1995 to create CD returns. That is what they have historically done and will continue to do. While there may be anomaly years at times current offerings are pretty much going to give CD returns. Unfortunately there are a lot of folks out there (including radio talk show hosts) hawking these products when markets correct, preying on investor's fear and simply not telling the truth! I know because some of my clients (intelligent clients) have been pitched these.
In the world we live there is no return without risk. Investors make money by making good choices based on the odds. The odds are based on fundamentals which we believe to be investment quality, valuation, and growth. Investors like John Maynard Keynes, Warren Buffett, and others, have been making these bets since the 1920s and navigating long-term risk. If someone is pitching you an annuity or insurance, we would love to dissect this and give you the transparent truth as well as honest alternatives.
You can't be risk-free, but you can be worry-free. Contact me to learn more about Worry-Free Portfolio Management. The first tenet is to avoid conflicts of interest. Insurance agents are incentivized to sell insurance. Since we got rid of our licenses over 5 years ago we do not have that conflict.
