Annuity Risk Hedge
In the years of experience in dealing with sophisticated stock investors, who would rather lose everything they have in the market rather than even consider an annuity as a safe alternative, one overriding conclusion is clear. Playing the market is gambling. And many of those who play the market resultingly exhibit dependent psychological behaviors which prevent investment foundational concepts like safety and risk hedging from prevailing over impulsive reactions. Here's a personal story to prove the point.
A Gambling Study
I was introduced to the casino table game of Craps a few years back. What a great game…or so I thought! Gameplay can be so simple, and at the same time can be so convoluted and technical. It is a game that can easily take a participant through ecstatic highs and suicidal lows within seconds. As I learned the game over time, I observed my own actions (and reactions) in relation to others.
When I was up with gains, nothing in the world could stop me from betting more and risking more. When I was down with losses, nothing could stop me from continuing to bet…until finally I had lost my last chips. I hated losing over and over again. So I read craps strategy books to learn the best techniques. I even paid thousands of dollars to attend craps classes on how to throw the dice better. After all of that and hundreds of hours of practice…Did I ever get better? No. In fact in the end, I finally learned the greatest tip of all to winning at craps…never play in the first place. For you, investing in the market is no different from my experiences with craps.
Will the LAST crash be your last?
When the market crashed in 2008, it wasn’t the first time. And it won't be the last. The market is based on an infinite number of external factors over which you have no control. I love to hear people tell me about how they can time the market or how much they’ve made. I smile knowing the percentage of those who actually beat market on a consistent basis is infinitesimal. Look at the simple chart below of a S&P 500 no-load mutual fund in comparison to a no-risk indexed annuity with a 5% up-front bonus and a 7% average cap.
The market will rise and the market will fall. Now that many of you have made up your losses from the last great fall, are you going to risk it all again? Or are you going to create your own risk hedge with one of the no-market risk indexed annuities we can help you set up?