In the current financial scenario, investors are looking to find more reliable investment schemes that have lesser risks but provide assurance of better returns on their investments.
Keeping this in mind, the time is just right for you to bring up and talk about fixed index annuity schemes with your clients and prospects that are looking for good investment options. At one point of time, real estate related investment trusts and schemes were considered to be good investment options. Individuals could safely invest money in these schemes and watch their funds grow as part of these investment plans. Real estate then, appeared to be a very logical, extremely attractive investment option. Wherever you turned, shopping malls, hospitals, theaters, commercial offices and storage facilities were fast rising at alarming speeds. At the peak of their success, real estate related investment options were able to provide an average of 7-8% yield which for the most part, was considered an attractive investment. But then, as everyone knows, ever since the real estate crash of 2008, the trend to invest financial funds in the real estate market has seen sharp reversals. The average return on investment from real estate related investment schemes was only around 4%. This was much below what it used to be before the real estate crash.
With yields having fallen to what they are now, investors – both individual and businesses – are now looking to find more reliable and dependable investment schemes. Investors are primarily interested in investment schemes that are low risk investments and yet offer better returns of investment as compared to the real estate investment schemes.
As per recent published studies and research, of all the largest real estate investment organizations, eight of the largest such companies have lost thirty seven percent of their value within the past seven years.
Losses have totaled to over eleven billion dollars. Large established corporations like CNL Lifestyle and Dividend Capital Total Realty have seen their once-profitable real estate holdings and shares plummet like never before. While CNL’s share values have dropped to seven dollars from the once existing ten dollars, Dividend Capital’s shares dropped from ten dollars to about six dollars. This depreciation in share value has occurred all across the industry. The most popularly known reason for this depreciation has been pegged to be the all-time high unemployment rate. The unemployment rate stood at its highest ever in October of 2009, when it touched ten percent. If a large population of individual did not have jobs, then it was obvious that with the economy being what it was, they were far less probable to invest in new homes or purchase mortgage refinancing.
Recent news articles do suggest that the unemployment rates are on the improvement curve, however, even with the improvement, individuals are wary of investing in financial investment schemes like mutual funds. Mutual funds do not provide an assurance as to a minimum rate of return on investment when the real estate market is still not steady. Customers and prospects wish to reap the returns from a safe, secure, low-risk to no-risk investment scheme. This is where fixed index annuities help. They offer benefits that make fixed index annuities much more attractive than investing in real estate related investment plans. At the very least, fixed index annuity schemes provide safety. Individuals owning contracts of Fixed Index Annuities are assured to receive steady, continuous fixed retirement funds. They also do not have the added worry as with traditional real estate investment, about losing their principal payment, even if the real estate market were to perform pathetically. To combat the rising rate of inflating, fixed index annuities also have the option of including riders on the contract. Riders can raise the annuity scheme’s payout by 3% to 5% on an annual basis. However, annuity riders do come at expensive prices.
During the growth and expansion phase, fixed index annuities also offer other desirable aspects and features which set them apart from real estate related investments.
Because the accumulated value of the annuity is tax-deferred, interest from the annuity is able to get compounded at a much faster rate in much lesser time compared to real estate investments. Regardless of what the non-believers might be saying, fixed index annuity contract owners do enjoy a lot of liquidity on their assets and investments. They have the option of withdrawing up to ten percent on an annual basis without having to pay up any penalties. Fixed index annuities offer contract owners many benefits over real estate related investments.