Investors often purchase annuities without really understanding what they bought, usually because the sometimes over-hyped guarantees sound so good their eyes tend to glaze over.
Variable annuities differ from fixed annuities in that assets are invested in mutual funds.
Think of a Reese’s cup. Peanut butter inside are the mutual funds; the chocolate coating is the insurance wrapper… which brings up the point: There are some differences from investing in mutual funds directly: Continue reading
Ask anyone. Most investors tend to associate risk with loss. But losing money can happen without market risk every day: Congress can raise taxes, inflation can reduce purchasing power, your spouse can beat you to the dresser in the morning.
Investment risk incorporates other risks and understanding them, along with the potential return associated with each one of them can help you determine whether your investments are appropriate for your situation. Continue reading