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Investing for Safety and Growth
November 18, 2008 - Ben Feldman
As a Financial Advisor I am always asked where the best place is to put your money today. I answer, as far away from your kids as possible. Although that creates a chuckle our financial challenges today are not a laughing matter. CD's are low, the market is diving down, and people are afraid to open up their 401k statements. So here's a tip. If you are laughing all the way to the bank these days,that means you are probably going to rob it. Well, how do you invest today for safety and growth? First, ask your self if you want to be in the stock market. Then consider your age. If you are not prepared to lose anything, then stay out of it. Sure you can invest and make your money back. But, when will that be? Lose today and you might wait ten years. For instance, if you had invested 100,000 dollars in 1973 it would have been worth 55,000 eighteen months later. It would have taken you until 1986 to get your money back. If you can't wait like that then the market is not for you. A lot of people invest in variable annuities today. You can move your money around like funds in a 401k. But these products carry risk and expenses that you need to consider. Although these products may carry a death benefit guarantee you get current market value on liquidating for reasons other than death. The best place for your money if you are retired or near retiring or want safety is the fixed index annuity. You can invest in the market and only experience the gains not the losses. The principal is guaranteed, the interest rate is guaranteed, it is tax deferred and there are no fees. You participate in the market but there is no guarantee on stock market returns. This is for those folks who will need an income. These annuities have bonuses. I've seen them as high as 15%. That's a one time bonus. That's not bad. For peace of mind it's the fixed indexed annuity for me.
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