Financial Advisors: Jeez no wonder people are confused. LOL

[eliza61]

I'm the type of person when I clean my house I have on the TV primarily for background noise.

So this morning I'm changing linens and the TV is on CNBC and there's a guru on who says Annuities and bonds are a waste of money, don't do it. Doom and horror will fall on your head if you do.....

Now it's 6:30, I'm fixing dinner and the tv is on PBS. Now they've got a financial guru on who says don't invest in the stock market (he says go to vegas instead if you want to blow your money), invest in annuitites and insurance if you want to have your retirement last through your life.

Now I know each person and show has it's own agenda and I know it's each persons responsibility to do their own homeowork but I can see how you make a decision and then the very next thing you have some one yelling at you that you're a sitting duck for losing your money.

it's like those health advisory's. One day vitamin B is good for you the next day it causes cancer.



just an observation......

 

[Elainey]

Well, I guess you could say they are both right--it all boils down to risk--how much are you willing to risk loss? Bonds and annuities are safer investments, but typically don't grow as fast as stocks. Stocks have the potential to make more money, but in a recession, they don't grown. How much time to you have to risk a downturn in the market? If you have a long time to go until retirement, then you probably want to put most of your money into stocks. If you're going to be retiring soon and really can't take a big risk with your money, you might feel safer putting your money in annuities--just understand that the growth will be slow and over time, it might not even keep pace with inflation.

 

[punkin]

I'm the type of person when I clean my house I have on the TV primarily for background noise.

So this morning I'm changing linens and the TV is on CNBC and there's a guru on who says Annuities and bonds are a waste of money, don't do it. Doom and horror will fall on your head if you do.....

Now it's 6:30, I'm fixing dinner and the tv is on PBS. Now they've got a financial guru on who says don't invest in the stock market (he says go to vegas instead if you want to blow your money), invest in annuitites and insurance if you want to have your retirement last through your life.

Now I know each person and show has it's own agenda and I know it's each persons responsibility to do their own homeowork but I can see how you make a decision and then the very next thing you have some one yelling at you that you're a sitting duck for losing your money.

it's like those health advisory's. One day vitamin B is good for you the next day it causes cancer.



just an observation......

Annuities and bonds are completely different financial products. I would agree that IN MOST CASES, annuities make no sense. There are exceptions to that. Bonds are a very broad category which includes, corporate, treasury, mortgage backed, etc. They all have different risk profiles and returns. The stock market is complicated as well.

Anyone who takes financial advice from a talking head on TV, shouldn't be investing in anything complicated.

 

[Dean1972]

I concur with those opinion posted on the boards. As a financial adviser myself , you should seek advice from a professional that is tailored to your own individual needs, time frame & level of risk. Don't take advice from TV which is general in nature & does not take into account your own circumstances & goals.

 

[ceecee]

I concur with those opinion posted on the boards. As a financial adviser myself , you should seek advice from a professional that is tailored to your own individual needs, time frame & level of risk. Don't take advice from TV which is general in nature & does not take into account your own circumstances & goals.

Too many variables for someone to use blanket statements like that. As above your investments need to meet YOUR needs not someone elses.

 

[KelsiesMommy]

My DH is a Certified Financial Planner and pulled most of his clients out of the markets. He's doing a lot of annuities, bonds, etc. of course, many of his clients are conservative and don't want high risk

 

[manning]

Well, I guess you could say they are both right--it all boils down to risk--how much are you willing to risk loss? Bonds and annuities are safer investments, but typically don't grow as fast as stocks. Stocks have the potential to make more money, but in a recession, they don't grown. How much time to you have to risk a downturn in the market? If you have a long time to go until retirement, then you probably want to put most of your money into stocks. If you're going to be retiring soon and really can't take a big risk with your money, you might feel safer putting your money in annuities--just understand that the growth will be slow and over time, it might not even keep pace with inflation.

If you have a long time to go until retirement, then you probably want to put most of your money into stocks.

That's the key. The statement of you having a better chance in vegas is correct if....you are buying today and selling tomorrow. As an ordinary investor you don't have enough data to speculate and win. Even the big guys are taking big chances. But if you buy and hold for years you will have a great chance of coming out a winner. Note I say chance as it is not guaranteed.

Also you want to diversify.

 

[vacationer1954]

We're starting to think about retirement and so we've been researching these things a lot recently. This is what a couple of financial idiots have figured out about finance from what we're read and heard over the last year.

Someone explained annuities to me by calling them longevity insurance. You're betting that you're going to live longer than other people, and if you do then you continue to receive benefits from the annuity even after the money you put into the annuity would have run out if you invested it some other way. That extra money you get has to come from somewhere so it comes from the people who bought annuities and lost the bet because they didn't live as long as they were expected to.

Bonds are different from bond funds though people usually talk about them together because they're both considered to fill the same spot in your investments. I don't know anything about investing in actual bonds (except savings bonds). One important thing to remember about bond funds is that if interest rates go up then bond funds get hurt. But the federal reserve said that they're going to keep interest rates low until unemployment goes down. So at least for now that makes it sound like bond funds are a good place to be, except that bond funds are not going to help you get financially independent. One of the most popular total bond fund indexes made only 2.69% after taxes and sales charges last year. Adjusted for inflation, that means the bond fund returned less than 1%.

Stocks and mutual funds are a lot more volatile than bond funds. Sometimes you do very well, sometimes you do very poorly. But nothing has really changed in the last 30 or 40 years. Stocks and mutual funds will average out to do better than bond funds by at least a couple of percent. That's going to make a big difference over a long time. But there are no guarantees, so smart people balance the risks and rewards and do both. How much you have in stocks and bonds depends on how long until you need the money. If you need it now, like when you're retired, then you would put 80% into bonds and 20% into stocks. If you won't need it for 40 years the you would do the opposite, 80% stocks and 20% bonds.