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| Annuities. Gambling. House rules win. |
Last September I posted 9
Reasons Dividend Stocks were better than annuities. I likened annuities to gambling and wondered
why anyone with sense would go down that path.
With gambling you know it’s entertainment – or at least you should.
Annuities, however, are positioned as investments, not
entertainment. It’s not fun losing your
shirt, but with gambling, nobody’s being fooled. With annuities, someone is being specifically
paid to pull the wool over your eyes.
It turns out my September thoughts aren’t unique. Earlier today, USA Today posted an article by
Ken Fisher of Fisher Investments - Why
I still hate annuities: Here are the reasons these investments are bogus. Below are a few of the adjectives Mr. Fisher
used in describing different types of annuities starting with Variable
Annuities:
- The slow-killer cigarettes of investing
- Horsepucky!
- Offering dubious value
- America’s most expensive investment products
Fisher torches Indexed Annuities and Deferred Fixed
Annuities with less colorful but equally damning perspective.
His position isn’t new.
In 2013, CNBC ran a post on the pros
and cons of annuities. The cons
greatly outstripped the pros in quantity and quality.
In 2012, Forbes published an article titled, The
false promise of annuities and annuity calculators. The author detailed the math behind annuities
finishing with this thought. We don’t recommend an allocation to
annuities for any portion of your portfolio. Emphasis is mine.
If you’re bent on purchasing an annuity, consider studying
Latin and learning the phrase Caveat Emptor. You’ll be better educated and wealthier for
doing so.
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