Understanding Annuities

Even in today’s uncertain economic environment, saving or putting money aside for the future is still a paramount necessity. Unfortunately, saving can become overwhelming for some people when deciding where to invest. A simple and generally uncomplicated investment option to consider is annuities. Why? Well annuities offer guarantees.

To futher help you understand Annuities- An annuity is a contract between an individual and an insurance company. The annuity is an investment or savings instrument, and an annuity pays to a designated person, also known as the annuitant. The annuitant receives a specified amount of income for a specified time, or a lump sum at a predetermined date of maturity.

Annuities typically offer tax-deferred growth of earnings and may include a death benefit. Annuities fall into one of three types – fixed, variable, and equity-indexed annuities. With a Fixed Annuity, the insurance company guarantees that you will earn a minimum rate of interest during the time your account is growing. At the end of that time, the annuitant receives guaranteed periodic payments. These payments can occur over a specified period, such as 20 years, or for an indefinite period, such as your lifetime.

With a Variable Annuity, you choose to invest your purchase payments from a number of investment options, which are typically mutual funds. The rate of return and the amount of payments you’ll receive will vary and depend on the performance of the investment options you selected.

If you choose an Equity-Indexed Annuity, this is a special type of annuity in which your investment return is based on an equity index. This allows your interest to change based on the index to which your equity is connected.

Annuities will not provide a tremendously high rate of 15% to 25% returns, nor do they claim to double your money in three years. Instead, investors are provided with a guaranteed interest floor, generally around 3%, and a guaranteed amount of income available at a certain time. For this reason, annuities serve well for retirement, education savings, or for seniors wanting a safe and guaranteed return. I hope this article helped on understanding annuities and stay tuned for more free investing tips and smart investment strategies.

Free Investing Tips – Time to Invest in Blue Chip Stocks?

Free Investing Tips: Gregg Andreski

Okay, read carefully. This free investing tip could produce large gains. The falling market coupled with the flimsy economy has uncovered a unique opportunity. I am about to provide you with a significant investment tip. With this information you’ll be the envy of your peers.

Right now is an amazing time to set aside some money for what could be a lucrative investment in…

Blue chips — all of them! That’s right. Blue chip stocks are currently undervalued and are at lows that haven’t been seen since the Dolphins made Hootie and the Blowfish cry in 1996. Although it’s extremely difficult for investors to predict when the market will bottom out, there’s no disguising the fact that these blue chip stocks are on sale. Not just a Nordstrom 1/2 yearly sale or a Bed Bath & Beyond 20% off coupon, but a frightening Circuit City-esque clearance.

Out of the 500 companies in the S&P, 193 have an earnings-based price to earnings ratio of 10 or lower for the past year. Only 36 S&P 500 companies had that distinction in 2007. But you don’t even need to look at the P/E ratios. Simply conduct some basic stock research either via your favorite dartboard or better yet, your computer. Just listen to the names; it reads like a who’s who list of super companies; Ebay, General Electric, MasterCard, Dell 3M, Oracle, Microsoft, Southwest Airlines, Cisco, and Disney.

This free investing tip doesn’t stop with just those companies. As of March 9, Apple was trading at $83 per share compared to $189 last may. Sony is currently $19 per share compared to last June when it sold for over $51. Just check out the blue chips and pick your favorite.

Now, I’m not saying that these stocks can’t continue to stumble and post losses, but, when was the last time you were able buy a new $35k BMW for $14k on the lot? A $5k Hawaiian vacation for $2k? Or, a $700k house for $300k? Well, um, see California for that last one.

Even President Obama is noticing the unique opportunity. Following the day where the Dow Jones fell almost 300 points, he stated, “What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it.” U-S-A! U-S-A!

So again, this free investing tip could prove to be a lucrative investment move for your portfolio. Blue chips are drastically discounted at rarely seen prices. Put on your flannel shirt, turn up the grunge music and invest like it was 1996 — at your own risk of course.

For more free investing tips read Gregg’s latest article on Short Selling Stocks