Investing for the future, whether that is for retirement, purchase of a home, or any other long term plan the vehicle you use will always be very important.
Two of these vehicles are choosing between Annuity VS Mutual Funds.
Both have their strong points and even a few weak ones that should be looked at.
The first question that any investor needs to ask and answer is how great is the risk that you are willing to take and are you suited to make investments on your own or will you be looking for guidance.
If you risk aversion is low then you may not wish to venture into Mutual Funds.
While these investments are considered safe they still have a down side, much that was seen during the financial crises that most of the world has gone through.
However, if the possibility of a large gain is the primary driving force behind your investment then Mutual Funds may be the way for you to go.
If that risk aversion is high then you probably will be more suited to the safety of an Annuity.
Mutual Funds are stocks.
They rise and fall with the index that they are tied to and unless you have the stomach to risk your monies on your own via any number of online brokerage houses then you probably should visit one of the many brokerage houses in your hometown so you can meet a broker and hopefully develop a rapport.
You will need to be very clear as to the objective that you are attempting to work towards so your broker fully understands your prospective.
He or she will then give you several different funds that they think will enable you to reach your objective.
They will be able to forecast the rate of return that you should be able to reach.
Then you have to decide on whether this is the course of action that you will take.
If you decide that Mutual Funds are the best vehicle for you then you need to decide which fund you are comfortable with.
The broker that you choose to work with will be able to answer most if not all of your questions about each fund.
Make sure you ask and fully understand the answers.
Now then, if you risk aversion is such that any risk will drive you to the brink then you probably will need to look into an Annuity.
Annuities are sold primarily through large insurance companies and most of their agents have the required licenses to sell these products.
All investments are protected and watched by the SEC.
They require that anyone selling these investment to be educated and licensed.
Here the insurance company will show you the best case rate of return but please do not be gullible and think that this marvelous return is what you will see.
They will also show you the worst case and again don't be taken in by this very low figure.
Use your mind, determine what the value in the middle is and that is a safe bet as to what your Annuity will pay.
One last thing about an Annuity, these vehicles are based on a preset period of time.
If you are looking to save for the purchase of a home the time frame of the Annuity must fit the time frame that you are looking at.
The one area that these two investments have in common is the fact that most require you meeting with someone who is allowed to sell them.
Here is it very important that you feel that either the broker or the insurance agent is trustworthy and will do the best job in helping you obtain your investment objective.
Remember, if you are not comfortable with the person you are talking with there are many others out there just waiting to be of service.
The question of an Annuity VS Mutual Funds is an important one and you must do all the research required to answer the question correctly.
You must fully understand exactly what it is that you are trying to accomplish and then determine the best way to go about accomplishing that objective.
Two of these vehicles are choosing between Annuity VS Mutual Funds.
Both have their strong points and even a few weak ones that should be looked at.
The first question that any investor needs to ask and answer is how great is the risk that you are willing to take and are you suited to make investments on your own or will you be looking for guidance.
If you risk aversion is low then you may not wish to venture into Mutual Funds.
While these investments are considered safe they still have a down side, much that was seen during the financial crises that most of the world has gone through.
However, if the possibility of a large gain is the primary driving force behind your investment then Mutual Funds may be the way for you to go.
If that risk aversion is high then you probably will be more suited to the safety of an Annuity.
Mutual Funds are stocks.
They rise and fall with the index that they are tied to and unless you have the stomach to risk your monies on your own via any number of online brokerage houses then you probably should visit one of the many brokerage houses in your hometown so you can meet a broker and hopefully develop a rapport.
You will need to be very clear as to the objective that you are attempting to work towards so your broker fully understands your prospective.
He or she will then give you several different funds that they think will enable you to reach your objective.
They will be able to forecast the rate of return that you should be able to reach.
Then you have to decide on whether this is the course of action that you will take.
If you decide that Mutual Funds are the best vehicle for you then you need to decide which fund you are comfortable with.
The broker that you choose to work with will be able to answer most if not all of your questions about each fund.
Make sure you ask and fully understand the answers.
Now then, if you risk aversion is such that any risk will drive you to the brink then you probably will need to look into an Annuity.
Annuities are sold primarily through large insurance companies and most of their agents have the required licenses to sell these products.
All investments are protected and watched by the SEC.
They require that anyone selling these investment to be educated and licensed.
Here the insurance company will show you the best case rate of return but please do not be gullible and think that this marvelous return is what you will see.
They will also show you the worst case and again don't be taken in by this very low figure.
Use your mind, determine what the value in the middle is and that is a safe bet as to what your Annuity will pay.
One last thing about an Annuity, these vehicles are based on a preset period of time.
If you are looking to save for the purchase of a home the time frame of the Annuity must fit the time frame that you are looking at.
The one area that these two investments have in common is the fact that most require you meeting with someone who is allowed to sell them.
Here is it very important that you feel that either the broker or the insurance agent is trustworthy and will do the best job in helping you obtain your investment objective.
Remember, if you are not comfortable with the person you are talking with there are many others out there just waiting to be of service.
The question of an Annuity VS Mutual Funds is an important one and you must do all the research required to answer the question correctly.
You must fully understand exactly what it is that you are trying to accomplish and then determine the best way to go about accomplishing that objective.
