This investment seems too good to be true — is it?
March 5, 2019 by Mark Hulbert
Would you be interested in an investment that’s guaranteed not to lose money but which makes money when the stock market goes up?
Of course you would. In fact, such an investment seems too good to be true: How can you earn equity-like returns without incurring equity-like risk?
However unbelievable, however, such investments are available—at least if you believe the companies that have created them. But are they as good as their marketers claim?
I am referring to what’s known as a Fixed Index Annuity, or FIA, which both provides you a share of the gains produced by whatever index to which the FIA is benchmarked (such as the S&P 500 SPX, -0.11% ) while also guaranteeing that you won’t lose money. One way of thinking about an FIA is that it transforms an equity investment into something closer to being fixed income. (FIAs used to be called equity-indexed annuities.)
Click HERE to read the full story via MarketWatch.
