Talking stocks, trading, and investing in general

Discussion in 'Business, Careers & Education' started by mikeman, Feb 2, 2011.

  1. lawyerdad

    lawyerdad Senior member

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    I'm no expert either, but my very limited understanding is that while certain annuities are perfectly appropriate investment vehicles for some people, they generally are a minefield of crap. Variable annuities in particular. If it's worth it, a decent independent financial planner, or an attorney who handles FINRA cases and the like, could probably given you a quick, simple answer. The financial planner route may be cheaper, but in either case I'd ask for a cheap flat fee. If you can find a friend of a friend, they might even be willing to do it for free as a favor or networking opportunity. I'd think someone who works in this area would be able to determine in 15 minutes if the annuity is basically legit or a total dog. (If the former, a judgment on whether it's an appropriate investment vehicle for your in-laws' investment needs and objectives may be a bit more involved.)
     
  2. idfnl

    idfnl Senior member

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    Another complaint I've heard is that some are extremely hard to back out of.
     
  3. Piobaire

    Piobaire Not left of center?

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    It seems to me doctors often make very poor financial decisions. I know more than one doc working in their 70s because they cannot afford to retire. Their poor decision making probably is no worse than the average Joe in frequency, but due to their high earning power, they get targeted and the magnitude of their mistakes are larger. They probably were sold on the tax advantaged nature of the annuity.

    I have to say I have not ruled out purchasing an annuity upon retirement with a portion of my portfolio for the same reason I don't plan to collect SS until I'm forced to.
     
  4. archetypal_yuppie

    archetypal_yuppie Senior member

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    These strike me as opposites. In one you are defering cash flow stream, and in another you are initiating one.
     
  5. Piobaire

    Piobaire Not left of center?

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    The fear of nearly every retired person is running out of money in the late stages of retirement. Deferring SS until the legal mandatory age nets you a higher monthly payment and buying an annuity, joint and last survivor, means you have an income until the bitter end. Getting a nice annuity means you've removed that amount from the vagaries of the stock market and have a forecastable and unending income stream.
     
  6. lawyerdad

    lawyerdad Senior member

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    Obvious point, but still . . .
     
  7. archetypal_yuppie

    archetypal_yuppie Senior member

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    Ah. I viewed it through the lens of consuming vs. deferring PMTs rather than what you meant.


    Possibly get screwed on inflation though. Not sure about counterparty risk. I'm sure they're heavily regulated, but I don't know if insured in any way. I'd prob go with bond ladders.
     
  8. Piobaire

    Piobaire Not left of center?

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    From what I understand they are heavily regulated and I have no doubt it's to the benefit of the industry to be exceedingly stable and never default. Who would lock up their money in an annuity if there was material risk of loss?

    There's certainly risks, inflation being one as you mentioned, but there's also safety in that as in you have assured returns and no capital at risk in the market. Many folks are not sophisticated enough to handle bond ladders and also we're talking old age so there's dementia to think of. Having a certain income stream on autopilot is probably not a bad thought for the last stages of retirement.
     
  9. archetypal_yuppie

    archetypal_yuppie Senior member

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    Fair points.


    Never underestimate the irrationality and financial / markets ignorance of retail investors. Everyone discounts tail risks way too heavily, and people tend to have very short memories, which is why financial crises happen every 5-10 years.

    Millions of sophisticated accredited investors and even institutions didn't realize that they were exposed to counterparty risk with Lehman structured products, not to mention everyone's mega-fail with MBS/CDOs.
     
  10. idfnl

    idfnl Senior member

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  11. GreenFrog

    GreenFrog Senior member

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    About time they get punished.

    What the fuck was Bezos thinking with the Fire phone?
     
  12. idfnl

    idfnl Senior member

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    I dumped it. Lost 1.8%.
     
    Last edited: Jul 25, 2014
  13. jbarwick

    jbarwick Senior member

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    When you should up late to the game, it is hard to get people to change. I've also read reviews of the tilting phone to move the screen instead of swiping it...terrible.
     
  14. Biscotti

    Biscotti Senior member

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    I bought my first stocks not so long ago. Kirby Chemical and Trinity Ind. They both have been performing pretty well--I wish I bought them back in the fall when I initially planned to.
     
  15. lawyerdad

    lawyerdad Senior member

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    Exactly my reaction on this point.
     

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