An increasing number of persons, as Dr. Makow, comprehend the international bankers' political agenda.
When markets are controlled, volatility is orchestrated. Investors, America's retirees in particular, were burned badly in 2000 and again in 2008.
Astute observers Noam Chomsky, for example, anticipate worsening conditions. See Requiem for the American Dream.
Those of us who have lived in this country for a number of years realize that times have changed drastically. Diversification, the traditional approach for coping with market volatility, didn't work in 2008 when all investment classes tanked.
It is not comforting to realize that retirement assets positioned in the stock market can, in a few days or even hours, be severely reduced or even wiped out in an inevitable market "adjustment".
Retirement plans for Americans who worked and saved for a lifetime have been thwarted also by low interest rates established by the international private banking cartel that, in 1913, named themselves the nation's Federal Reserve.
Our nation's central bankers have been flooding its "economy" with currency, destined to result in inflation. Financial advisors persist in suggesting a mix of 20% bonds and 80% stocks, or 40/60, or 50/50, with the idea that bonds are particularly safe and off-set stock-market risk. Many persons do not understand the risk posed by inflation to conventional bonds and bond funds. Bond yields and current values move in opposite directions. In times of general interest rate increases (inflation) conventional bonds are a disaster if needed to be cashed for living expenses, a medical emergency, or due to reduced investment income.
In order to survive financially in retirement you cannot afford to lose any "nest-egg" money at all unless you happen to be a multi-millionaire. The alternatives to market risk are fixed interest-bearing accounts held by multi-billion dollar institutions: CD's and fixed (not variable) annuities. Of these, CD's provide much less in the way of yields and tax advantage.
A few words about combining savings with life-insurance:
U.S. life insurance companies, in an industry of historically questionable public integrity (see bibliography of books since 1877, including my own in 1980), are now aggressively selling variations of cash-value "life-insurance" called by different names, Universal Life (UL), Indexed Universal Life (IUL), and Equity Indexed Universal Life (EIUL), pitched by illustrating an accumulation of retirement funds within a "permanent" (lifetime) life-insurance policy.
These varieties of life-insurance, introduced following my widely read trade book, are sold regardless of the need for lifetime life-insurance and are predicated upon cash-value accumulations that I, along with many other fiduciaries, consider highly problematical. For a comprehensive financial analysis of this issue, see this article. If you purchased such a policy and feel that it was misrepresented by the selling agent, for legal help see this website.
The financial analysis article referenced above addresses the inefficiency of combining savings in a new generation life-insurance policy versus meeting mortality risk by purchasing low-cost term insurance and funding one's savings separately in market index funds. We could not agree more, while bearing in mind that index funds are fully subject to market volatility risk that triggers the sequence of returns problem potentially devastating to older investors.
Whereas CD's address the volatility issue, their yields are minimal compared to those credited to deferred fixed annuities, shorter terms of which offer considerable liquidity. A fixed deferred annuity can provide you safety of principal subject to an insurance company's financial ability to meet its contractual obligations. This is a very different product from a "variable" annuity that is subject to market risk and in which money can be lost.
The word "annuity" is, unfortunately, used in connection with two quite different financial products: the deferred annuity and the immediate annuity. The former refers to an accumulation or savings account within a life insurance company. The latter refers to a periodic payout from a life insurance company following the "annuitization" of funds given to them, either through longer term deposits in a deferred annuity or a one-time lump sum given them for the purpose of periodic, usually lifetime, payouts.
Whereas we are a huge proponent of the "deferred annuity" account, we rarely suggest "annuitization" of funds. Within the deferred annuity, interest is credited on a tax-deferred basis. Henceforth in this page the term "annuity" refers solely to that of the "deferred annuity" that does not contractually demand eventual annuitization.
Wall Street's trained (stock market) commission-paid salesmen may be reluctant to place customers' assets into annuities. Money that has been positioned safely in annuities is no longer available to them for selling commissionable "securities", many of which contain ongoing expense charges such as 12b-1 fees in most mutual funds.
Not only does money in a fixed annuity never go backward, it is guaranteed annual growth. The five year period of 2007-2012 saw an essentially flat return (.07%) in the stock market. In its worst year, when stocks lost 43.7%, fixed annuity accounts experienced no loss and actually increased in value. These accounts have continued to grow from their undiminished 2008 values as markets rebounded and will continue growing throughout the next stock-market "adjustment".
For reasons mentioned above, we often recommend that some portion of one's retirement nest-egg be placed in these products, preferably a diversified mix of annuities, each selected for providing a specific financial benefit.
Stockbrokers and competent advisors correctly point out that indexed annuities limit gains that an investor can receive during upswings in the stock-market. Fixed annuity products were created to combine a guaranteed growth, often together with periodically declared additional interest or an amount of growth that is a function of the increase in a market index. They protect against any loss of principal during market declines, thus solving the sequence of returns problem.
I have, for years, considered it ironic that an industry pushing what I consider to be some of the worst financial products (cash value life-insurance policies) should make available excellent ones (term life-insurance and fixed deferred annuities).
In todays world of high market volatility and periodic crashes, astute investors ought to be able to sleep securely knowing that a significant portion of their own retirement nest-egg is contractually linked to the assets of one or more multi-billion dollar (A+ rated) institutions.
This is an area in which I have years of experience. It is critical today that your own situation and goals be addressed with appropriate financial products. We are speaking of accounts that can never lose money due to market risk and that investors can rely upon to produce income for the rest of their life.
This website is provided for informational purposes only and is not intended to provide any tax, legal, financial planning, insurance, accounting, investment, or any other kind of professional advice or services. Nothing on this website should be construed as an offer to sell or a recommendation for any security, insurance policy, or investment strategy. For your information this Website may provide links to other websites that are not operated by Stewart Ogilby. Those links do not mean that Stewart Ogilby necessarily endorses, approves, or sponsors any products or information available at the linked site. Before purchasing any financial product be sure to do your own due diligence and you should consult with an appropriate tax or legal professional before taking action based on any suggestions or information on this site. You alone are solely responsible for determining whether any financial or insurance strategy, product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. By contacting Stewart Ogilby you may be offered insurance products by an agent licensed in your state. Annuity product guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Annuity riders may be available for an additional annual premium that can provide additional benefits and income guarantees.