Annuity News

More on the Bond Vigilantes and Inflation Expectations

As mentioned recently , global investors have been signaling their unease with the U.S. budget deficit by selling bonds and subsequently driving up yields on U.S. debt. The U.S. government's decision to employ trillions of dollars in deficit spending as a way to try and kick-start the economy has resulted in higher inflation expectations and higher borrowing rates on everything from mortgages to credit card debt. The yield on 10 year Treauries has increased 1.5% from the start of the year. This...

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Inflation

Bond

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Obama Administration

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John Bogle Sees Stocks Taking Ten Years to Return to Highs

Speaking at a recent industry conference, Vanguard founder John Bogle indicated that he thinks it is quite possible that it will take until 2020 for stocks to return to their 2007 highs: “Is it possible when we get to 2020 the S&P won’t be much above 1,550? You’re darn right it is,” Bogle, 80, said in an interview at a conference in Chicago organized by research firm Morningstar Inc. Bogle also mentioned that he expects 1 to 2 percent growth in the U.S. economy, and that stocks are more...

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Teacher's Insurance and Annuity Association of America Maintains Top AAA Rating

Moody's Investor Services indicated that it will maintain its highest (AAA) rating for the Teacher's Insurance and Annuity Association of America (TIAA) and its subsidiary TIAA-CREF Life Insurance Company. "TIAA has substantial capitalization and flexibility to maintain its financial strength in what is a very difficult economic environment," Moody’s Senior Credit Officer Arthur Fliegelman said in a statement. "However, the company has not been immune to environmental stresses, having...

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Bond Vigilantes Return with Inflation on Horizon

Yields on the 10 year Treasury have been climbing consistently over the past several days, ending above 3.7% today. Increasing interest rates are welcomed by insurers and consumers who are still considering an annuity purchase. The trend is troublesome, though, for those who have recently locked themselves into a fixed annuity without inflation protection. Similar to the 1970s and 1980s, global investors are driving up interest rates in light of concerns about inflation that could be ignited by...

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Moody's Optimistic on Life and Annuity Insurers

Rating agency Moody's released a brief that expresses a bit of optimism regarding life and annuity insurance companies: "Even if markets turn sour again, life insurers and reinsurers are considered to be fit enough to weather the financial and economic crisis because of their solid balance sheets..." While Moody's indicated that additional ratings downgrades may result if market conditions worsen, their own stress tests indicate that companies should be able to maintain their investment...

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Large Declines in Variable Annuity Sales Seen While Fixed Annuity Sales Surge

Sales of variable annuity products in the United States cratered 27% during the first quarter of 2009. First quarter sales were $30.7 billion compared to $40.9 billion during the first three months of 2008. At the same time, sales of fixed annuities surged 74% to $35.6 billion. This is the first time since 1995 that sales of fixed annuities have exceeded sales of variable annuities for two straight quarters. This sales dynamic is not surprising and is largely a reaction to the market volatility...

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Fixed Annuity

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Seven Solid Financial Tips for Recent Grads

A great list of financial tips to pass along to any young (or older) person, with straightforward advice such as "saving is a form of freedom" and "the key to financial well-being is spending less than you earn:" Don't buy individual stocks. Start contributing to a 401k early. Know what is in your 401k. Make more than the minimum payment on your credit card balance. Your credit score is critically important. Saving is a form of freedom. Buy things cheap - the easiest way to save money is by not...

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TIPS

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Marc Faber on the Possibility of Hyperinflation in the United States

Noted investor and publisher Marc Faber believes that the United States will ultimately experience inflation rates that approach the extremely high levels seen in Zimbabwe during the past year: “I am 100 percent sure that the U.S. will go into hyperinflation ,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates , they will be very reluctant to do so and so inflation will start to accelerate.” Faber has been a...

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Inflation

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Marc Faber

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John Bogle on Buy and Hold Investing

John Bogle maintains his firm belief that a buy and hold strategy combined with low cost index funds results in the only reasonable approach for the individual investor: "Of course buy and hold is the thing to do. A genius like Jim Cramer hasn't gone anywhere for 10-14 years and few [managed] mutual funds have beaten the market indices during the same period. It's just market timing, and your good market timing is my bad market timing. [We invest within] a totally illogical system where we move...

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Top Financial Planner Comments on Immediate Annuities, Longevity Insurance and Long Term Care

One of the nation's top financial planners is bearish on the recent upsurge in immediate annuity sales. An advocate of maintaining options and flexibility with retirement planning , this financial advisor sees immediate annuities as too restrictive for many financial plans. In contrast to the views on immediate annuities, longevity insurance or longevity annuities are discussed in light of the income and asset allocation options they create for retirees: "Of all the products that are out there...

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