For someone who has sufficient money for investment purposes, high-risk ventures maybe a good idea. This is because the success of such an enterprise usually means that you will have high returns. However, when the deal turns sour, the person loses his investment either in part or in full amount. This person would not feel the pinch of such a loss because he can get some more money. On the contrary, someone who does not have the pleasure of getting any other capital if he loses his initial amount cannot take such risks. A good example of this person is anyone who is investing for purposes of securing his retirement days. This person would rather have a low risk investment scheme with a guaranteed level of returns. Therefore, what options does this person have?
A good investment idea for someone who is in such a tough position is a fixed annuity. In this case, you will deposit money with some insurer of choice. Then the insurer will put this money into the stock markets on your behalf. Well, it might seem that you are still in the risky business of stocks but don’t worry. This is because the insurer usually carries your investment risk. Then the firm reduces its own risk by having many clients.
With the fixed annuity investment, you will have an assured level of interest irrespective of the market’s trends. Even when the market is moving in a direction that leads to losses, you will not lose your capital. Even if the stocks prices were not pleasing for an entire year, you would still receive the minimum interest as promised by the insurer. This is very much different from investing directly into the stocks market.
The direct investment would necessitate that you become vigilant in observing the market and in making the right trading decisions. This can be an easy thing for someone who has developed the trading skills, which usually happens over a long period. However, for a new person in the markets you would have to start by reading so that you can understand how the markets work and determine indicators of a good trading point. Most stocks’ brokers provide trial periods whereby you can learn how to use their software and understand the markets fully. However, considering that you are in a busy career, this can be very challenging because it would require quite some of your time.
When you invest in a fixed annuity, you will not need to have all this time at your disposal. The insurance firm does all the trading and gets you your interest. Actually, the venture’s advantages also include the way that the interests accumulate.
The annuity allows you to make money via interests without paying any taxes. This can be advantageous because the money that was supposed to be deducted from your account is added to your principal and the reinvested in the market. Therefore, by the end of the investment period you will have made more money than the person who earns interests at the same rate as you. This is despite the fact that you will not have spent any time in observation of the market.
Finally, people who make huge investments usually make a substantial amount of income. With an annuity investment, you will have the opportunity to invest as much money as you would like to. This advantage may enable you to have a secured retirement life.
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