The markets still in turmoil . . .

Do we have a deal or don't we?!?!?! It appeared the financial bailout deal ($700 billion) was hammered out in extended sessions over the weekend, and it was now going before Congress for a vote. Unfortunately we are in a big election year (November 4th), and I believe we are seeing the political wranglings at this time. Whenever it looks like something is going to happen (markets rise a bit), we then have someone wanted to stall or change some detail of the plan.

Look, none of this is any good - we shouldn't be in this mess in the first place, but we are! We you spill a glass of milk in the kitchen, you don't spend time moaning about the glass slipped, your hand was wet, how to protect the kitchen floor from future spills, getting guarantees that the milk if it falls, we go sideways rather than landing on the floor! ------ NO, you clean up the milk first!

We are in a world of financial hurt both in the U.S. and the foreign markets (as they seem to watch us for what we are doing and then react the same). We need to do something! There will be more regulation coming out of this just like the 1930s, after the Great Depression and in the 1980s for the Saving & Loan crisis. We seem to put ourselves in this position every now and again (greed gets the best of us; or at least some of us who work in this industry) and some get hurt, but we always survive.

The markets need some stability, markets to not like uncertainty and financial institutions need to do something with the money (sitting on it makes no revenue), but those customers are either unsure of the future or if wanted to borrow are finding things really tight and they don't have access. We could end up in a depression if this doesn't get resolved soon. If no one is buying, then nothing is made, no one is working, etc. --- it is a vicious cycle.

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Annuities

Personally, I don't like them, but I know there are planners and others in the financial world who like them. I would never put a client in them if they asked me (s0me do it and then ask what I think???). Overall the concept is a good idea, but I am a firm believer people have no clue what they are buying.

They are signing a contract. A contract in which they have few rights and the insurance company has most of them. One of the reasons a person considers an annuity is that is sounds good, easy, and on the surface makes sense. They are looking for something "safe" and "guaranteed", with little to do after setting it up. Annuities are insurance contracts. There are two types "fixed" with a steady rate of return established at the front end, which accumulates or pays out periodically (depending on how it is set up). A "variable" annuity will have a rate of return that fluctuates, possible of making more than the "fixed" but also possibility of making less. Consumers looking for that "guarantee" will opt for the fixed annuity - bad choice! If I had to force someone into an annuity it would always be variable. Why? Simple, again these are insurance products. With a fixed annuity the annuity contract moneys are co-mingled with the Insurance company funds - in a sense they are in the same boat together. Okay, if the boat doesn't sink ----- every hear of AIG!!!!

Now, a variable annuity does not co-mingle the funds from the annuity with the insurance company, so in my opinion, can be a little safer.

Another reason that I do not care for them is the high fees (as much as 8.5% of your invested amount. Yes, the brokers will tell you "it is a declining fee", which means that if you invest and keep your money in for 5-7 years or so you may not have to pay anything on the way out, as each year the 8.5% you lose gets lower. My issue is if I invest $10,000, I want $10,000 working for me, not $9,150 like it would be with an annuity (after the sales charge).

Anyway, enough ranting for today . . . . . . someone just sit down and decide something!!!