A bear market can be a scary time for investors. If you’re worried about your investments, now might be the time to think about investing in a fixed index annuity. Here are four reasons why:
Fixed index annuities offer several advantages during a bear market.
Every five years or so, a bear market occurs. The average fall is 39%, and the typical duration is 18 months. This is difficult for the economy and investors, as it lasts for about 18 months on average. However, what must be remembered is that it is also transitory.
You might lose money as an investor, but you may also have the potential to improve your returns over a longer period and eventually make a profit. Unfortunately, it generally takes just over five years to break even.
So, how can a bear market be beneficial to you? One solution is to look into a fixed indexed annuity (FIA), which was created for situations like these. Tax-deferred growth is available through FIAs, many of which allow you to earn guaranteed lifetime income within the same product while also protecting your premium from market swings.
FIAs are a solid option because they have the potential for growth while posing no risk of premium loss owing to market downturns. You’ll want stability and future growth opportunities during a bear market.
Low-Risk Investment
When stock and other investments fall due to market volatility, FIA provides a unique opportunity to earn interest linked to expanding numerous stock market indices without taking on the associated risk.
The interest credits for a fixed index annuity will not represent the real performance of the index, but rather the closing values are used to calculate them. The index is used as a “measuring stick” to determine how much interest can be earned.
Protection From Stock Market Loss
One of the most significant advantages of an FIA is that it cannot lose money due to a market downturn, especially when the stock market falls.
Opportunity For Accumulating Wealth
Fixed indexed annuities are an insurance product that can help you build a solid foundation of steady growth. Still, it may also be used as a sound financial technique to provide you with a regular stream of income payments for the rest of your life.
Choose Your Retirement Income Today Or In The Future
Depending on your annuity, you may be able to start receiving annuity payments immediately after purchasing an FIA, or you may postpone them to a later date.
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