Lots of insurance companies sell variable annuities. Because the fees are high, they make a lot of money in the process. Baby boomers who are approaching retirement are a huge market for annuity companies. However, a lot of us have been (finally) educated about the negative aspects of variable annuities and have resisted buying. Then came the Guaranteed Lifetime Withdrawal Benefit (GLWB) rider. This changed the annuity landscape.
Archives for November 2011
The Congressional not-so-super committee that was tasked with deficit reduction was a spectacular failure. I expected this and prepared our retirement portfolio for it. Yesterday as the market experienced yet another precipitous decline, the stop market order I placed on our U.S. stock index ETF (VTI) reached its trigger price and our shares were automatically sold as the market went down. At least this way we locked in some gains. I expect more bad news ahead and more declines. It is time to sit these out with less equity exposure.
I periodically express my views on gold as a retirement investment. Generally I don’t get it, because many of those who advocate investing in gold generally own gold as a security blanket. In other words, they have no plan or strategy for selling it. They are waiting for the world economy to collapse entirely, at which time they will buy stuff with their gold. I have my doubts about that last part. Nevertheless, we own a relatively small amount of the GLD exchange traded fund. It’s gained about 38% over two years, with a lot of volatility in between.
When I heard the news earlier this week of a possible referendum in Greece about the EU bailout and austerity plan, I entered a new limit order to sell our VEU shares (all world stock index except U.S.) if the share price dropped by 6%. It did and all of our shares were automatically sold. As I said earlier, I have had it with the volatility and general lack of benefit from owning this foreign stock ETF.
The Euro Zone is a mess and Greece is a leading cause. Why do I care? Because the markets care. This is demonstrated by today’s negative reactions in the world markets to a strange and high risk decision by the Greek government: It is going to ask the voters to decide whether to accept austerity terms offered by the other EU governments to bail Greece out- again.