Do you have a 401k, 403b, IRA or other investments?

Likely, you have your money tucked away in a myriad of mutual fund accounts, such as bonds, growth funds, aggressive growth funds, balanced funds, international funds and more.

As a mutual fund owner, you celebrate when the market goes up and wince and hold your breath when the market struggles and your account balance dwindles downward.

For some people, they are in mutual funds out of necessity.

Are YOU in mutual funds because:
1) You don't know anywhere else to invest with the same potential return on investment
2) You know mutual funds can perform adequately but feel scared about the downside risk
3) That is the only option you are aware of for investing your money
4) You know you need a greater return than CD's or savings accounts

What if you DID have other places to invest your money?

What if your money was safer elsewhere?

Have you ever considered an Equity Indexed Annuity (EIA) ?

Phoenix Mutual Funds OR Phoenix Annuity

Let's compare Mutual Funds versus an Equity Indexed Annuity:

Mutual Funds - You earn 100% of the Gain. You also suffer 100% of the LOSSES

Equity Indexed Annuity - You earn a % of the Gain. You NEVER lose money.

An Equity Indexed Annuity has a "participation rate". That means you and the insurance company share in the Gains of the fund. But, you are guaranteed never to lose principal. Matter of fact, at the end of each year even your Gains are locked in and never at risk as you move forward.

What is a Particpation Rate: Let's say your EIA earns 10%. You would typically earn a percentage of the 10%, or around 8%. The insurance company receives the difference. IMPORTANT: the participation rate can vary from company to company, index to index. Verify exactly what your participation rate will be. Never assume it to be 80%

Would you be willing to share the profits with the insurance company if they guaranteed you would never lose money in down years?

Many people would.

Mutual Fund downside: if you lose money one year it might take you the next cycle to recover lost gains.

Not so in an EIA.

What is an Equity Indexed Annuity

Indexed means your money is invested in a specific index, such as the S & P 500 index, Russell 2000 index or something similar. It really is that simple.

You earn a % of the gains but never lose your principal. At the end of the year, even your gains are locked in.

There are advertisements on tv from major securities companies touting "short term" mutual fund returns, even as short as ONE quarterly return. Trust me - if you were not already in that particular fund, you missed out. If you stay in mutual funds try to stick with funds that have a long term track record, not short-term results.

As far as mutual funds, do not be swayed by advertisement touting short term gains.

An Equity Indexed Annuity takes out the guess work, the fear. The S & P 500, Russell 2000 and other indexes have long track records.

CONSIDER

In mutual funds you have to worry about being in the right "mix" of funds. Are you too aggressive, too conservative? You may have a couple good funds and a couple of dogs that pull the rest of your returns downward. What do you do??

THE BEST ADVICE

Never place all your monies into and EIA. The EIA should be in addition to other investing. But consider balancing a part of your portfolio in an EIA, mutual funds, and an account that has liquid funds. Also know that EIA's, like qualified accounts, have surrender penalties. Only invest money that you are sure will not be needed until retirement.

Read more about Equity Indexed Annuities at Phoenix Annuity OR Phoenix Mutual Funds

Gary Brown is principal owner of Choice Insurance of Arizona. He has been serving Arizona residents for car insurance and home insurance for nearly 14 years.

Find his website at http://choicearizona.com