Why Annuities Are Safer Than Stocks
When looking for a place to put your money for good growth, this is a valid question. First off, annuities are a collection of different kinds of securities. They'll be bonds, stocks, and other securities. This means your money is dispersed across a diverse portfolio. On the other hand, buying stock means putting all your money in one company. It's like that old saying: Don't put all your eggs in one basket. By diversifying, you reduce your risk of loss.
There's that other saying: there's safety in numbers. By having your money in many investments, some may go down, but others will go up. In that way, the overall trend can be upward, and you make a better return on your investment. Even if the stock market tumbles - as we've seen in recent days, but also having some of your money in treasury notes, bonds, and so forth, you can be relatively certain that your investment is safe.
Next, there's management. Mutual funds have a staff to manage the day-to-day operations, make decisions about buying and selling the investments, and review all information on which are the best places to put your money. Now, some people prefer to do that themselves; they consider it part of the fun of playing the market. But, if you're not interested in that, a mutual fund is ideal for you.
This leads into the next point: the paperwork. The buying and selling of stocks involves a lot of documentation, and that can be very time-consuming. Now, here again, some people relish that. But, if you don't, a mutual fund is a much better investment. The management staff handles the buying and selling without ever having to bother you. So, there's much less red tape associated with it.
If getting access to your money is important, then annuities are much better than stocks. You can get cash out of a mutual fund in one day. In the case of stocks, you have to authorize a sale, and then it takes three days to process before you get your money. If time is critical for you, mutual funds are best.
Finally, there's your time. Investing in stocks requires you to pay attention to either the market news yourself, or listen to the advice of a broker on a regular basis. With a mutual fund, they are much more stable - over the long-term; so you can almost literally invest your money and forget about it. For some people, that sort of piece of mind is very important.
There's that other saying: there's safety in numbers. By having your money in many investments, some may go down, but others will go up. In that way, the overall trend can be upward, and you make a better return on your investment. Even if the stock market tumbles - as we've seen in recent days, but also having some of your money in treasury notes, bonds, and so forth, you can be relatively certain that your investment is safe.
Next, there's management. Mutual funds have a staff to manage the day-to-day operations, make decisions about buying and selling the investments, and review all information on which are the best places to put your money. Now, some people prefer to do that themselves; they consider it part of the fun of playing the market. But, if you're not interested in that, a mutual fund is ideal for you.
This leads into the next point: the paperwork. The buying and selling of stocks involves a lot of documentation, and that can be very time-consuming. Now, here again, some people relish that. But, if you don't, a mutual fund is a much better investment. The management staff handles the buying and selling without ever having to bother you. So, there's much less red tape associated with it.
If getting access to your money is important, then annuities are much better than stocks. You can get cash out of a mutual fund in one day. In the case of stocks, you have to authorize a sale, and then it takes three days to process before you get your money. If time is critical for you, mutual funds are best.
Finally, there's your time. Investing in stocks requires you to pay attention to either the market news yourself, or listen to the advice of a broker on a regular basis. With a mutual fund, they are much more stable - over the long-term; so you can almost literally invest your money and forget about it. For some people, that sort of piece of mind is very important.
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