Why do all financial advisors tell the same risk story?

Question

This question is related to all these questions. Yahoo did not give me enough space to explain it all. Try & read in order.1. http://answers.yahoo.com/question/index?qid=20060905135601AARhX7H

2. http://answers.yahoo.com/question/index;_ylt=AkdNaoF0InsHX4vReFTmKQXzy6IX?qid=20060915163938AAen9C3
Well which is it? We have lost $1.2 million over 8 years following this rolling period story. If we follow this story over the next 15 or 20 years with an income draw of 3% or 4% how much will we lose? How about when we will go broke? No way! We want guarantees that we will not go broke? We want guarantees that we will live very well in retirement.This is why annuities work for us and why we will do only a small percentage in index stocks.

3. http://answers.yahoo.com/question/index;_ylt=AoDfSxrELIvWzXoyoPMhPlbzy6IX?qid=20060915163237AAoeMk3
These annuities have no chages or fees I get all that I listed. in other question.

Risk story is not true we lost $1.2 million.
Read all the backgroud from all links!

What negative return Jeff. Did you read what I did?
$479,905 got us $5,000 a month for 10 years
$913,030 got us $5,000 a month for as long as we both live

Of the $10,000 a month $6,560 is tax free

$500,000 at 5.10% for 5 years will be $641,185 in 5 years
$500,000 at 5.25% for 10 years will be $834,000 in 10 years

All interest is not taxed unless we take it out. These rates are guaranteed not to change.

Next is where our interest we earn depends on a stock market index.

$750,000 in a 7 year index annuity

$750,000 in a 14 year index annuity - this one gave us a $75,000 bonus and it's in our account now.

What about all the tax savings. Do the math!

Van Jon - Financial Advisors lost $1.2 million of our hard earned money in 8 years. I don't want others to get hurt! Annuities are a better way!

Answer 1

This is the story the buy and hold managers have been telling for years and it is drilled into every Financial Advisor Training program out there..

Rolling 10 Year periods was the biggest training concept for many years.

Since it will not work for 10 year periods starting in late 1998, 1999 & 2000, they adjusted the training to use 15 year periods.

Interesting tidbit, the more conservative who don't want egg on their face again are saying to use 20 year rolling periods. The market can not possibly show a loss over a 20 year period. Can it??????

Well " Past performance is not a guarantee of future results"

The universal statement that gets all Financial Advisors off the hook.

I agree Annuities Solve More Financial Needs for more age groups than any other Solution!

Annuities are The Best SAFE MONEY products! The three best are the following:

1. Immediate Annuities - For Guaranteed Monthly Income for Life, Joint Life or for a Period of Time: Go here to learn more - http://www.jdsannuities.com/immediate_annuities

2. Fixed Index Annuities ------Where your account value does NOT Decline in Value. -----Where the Credited Interest to your account does NOT Decline in Value. -------Where the interest you earn each year is based ONLY on the Upside of a Stock Index (You would accept a Cap on the Upside of say 8% in exchange for not having your account decline in value, wouldn't you???? I know I would!!!!) The Cap varies by company & annuity and is usually guaranteed for 1 year. Other crediting methods are also available. To Learn more Visit: http://www.jdsannuities.com/index_annuities

By the way, the way the insurance company is able to vary the interest you earn which is based on a stock index is by the use of a derivative for the interest part only.

Fixed Deferred Annuities - Where you have a wide selections of multi-year guaranteed rates or for 1 year, 3 years or 5 years. most are 5 to 10 year products. To Learn more and see most of the rates for yourself visit: http://www.jdsannuities.com/annuity_rates

To view the overall website for Annuities visit: http://www.jdsannuities.com

Answer 2

You want the truth? The simple real reason for what they do?

Most brokers and financial advisors are not in the business to make you money. They are in the business to not lose you a whole lot of money. It is by maintaining large portfolios that they are able to charge (management) fees off of which they make their money.

In reading your posts, all I can say is sorry. If you want to talk some time, I'll be glad to help you out.

But once you get some (decent) education on investing, there really will be no reason to ever lose money in a year again. EVER.

There are strategies out there where you have zero risk on your monies. (how can that be?) Well, the difference is knowing what you didn't know before. Most people don't know what they don't know. It's true, there are strategies for about anything you want to do (from 0 risk to lots of risk).

I'm still so sorry about what your financial advisor did to you. Hope you have enough left to make things work.

Let me know if you have any questions. I'll be glad to help.

Good luck!

Answer 3

If you have confidence that you can handle your own finances better than those in the business of being financial advisors, then the answer is to continue guiding your own ship. It's working for you and you've decided that paid advice is not a benefit to you.

Answer 4

the "risk story" is from the same manual drafted by regulations organizations - SEC, CFTC, etc. these orgs make sure investment professionals such as financial advisors, brokers and traders tell the same "risk story" to investors as means of protection. plus the story is true anyway.

Answer 5

CD, CD, CD, CD FDIC, Your money is insured with FDIC. Do not even think about something else. Cd's will yield at least 5%. That return sounds a lot better than a negative return. Or you can speculate on the Lumber Futures Derivatives and "Hit A Home run"!!!

Answer 6

This is a very simple question with a very simple answer: the more risk you are willing to take, the greater LONG-TERM return you are likely to earn.

There is no free lunch in investing. If you seek big returns, you must accept higher risk.

Answer 7

it extremely is the countless worst monetary suggestion I even have ever heard. till its a constructive ingredient, which i doubt reason there is not any such ingredient as a constructive ingredient. in the adventure that your cost on the domicile fairness is say 8% then you definately choose a minimum of an 8% return on you make investments merely to break even, in case you get like a 12% return then your in basic terms making 4% return it extremely is with reference to the comparable as making an investment in a protracted term cd, question is it the return on investment very well worth the prospect, in maximum situations in the adventure that your paying pastime and having to get a loan to take a place its no longer worth it by using fact the pastime fee is merely too extreme and for that reason your cost of return must be too extreme to conceal the fee. the prospect advantages will by no potential be worth it. I dont be attentive to of any investment it extremely is gauranteed to return that top of a return. i think in case you relatively like the inventory or investment and think of it could beat the pastime fee and its danger advantages is worth it then pass forward and do it. yet dont do it merely reason your dumb monetary consultant advised you to do it, thats merely undesirable suggestion and it extremely is extremely useful to checklist him to the SEC, reason advisors should not be advising like that.