(New York)

Fixed Index Annuities have suffered from some bad selling practices over the years, and resultantly, bad publicity. However, they can serve some very important roles in a portfolio. There are a few things to remember about them. Firstly, they were designed to compete with CD-like returns while giving complete principal protection. Don’t think of them as a market growth product, they are a life insurance product. Additionally, they are a very good vehicle for income rider guarantees, or contractually agreed guaranteed income. This latter point is especially relevant given that 10,000 Baby Boomers are reaching retirement age every day and we live in a near pension-less world.

FINSUM: When carefully considered and utilized, FIAs can be excellent products that provide steady income and peace of mind.

(New York)

We have ben warning for weeks that as the coronavirus continued to spread, airline and other travel stocks would continue to be wounded (and likely not recover soon). That is happening n a big way today as news of a quarantine in Italy sent markets into a panic about the spread of the disease beyond China. Cruise ships and airline stocks are taking body blows as a result, with Delta and American down 7% and 10% respectively.

FINSUM: These are massive losses, and the worst part about it is that there is unlikely to be a “V” shaped recovery in these sectors, as it will take some time for the public’s fear of the virus (and thus travel) to wane even after things start to get better.

(New York)

Stock across the developed world went into freefall today as news spread of the explosion of the coronavirus in Europe and the subsequent quarantine that has been put in place in Northern Italy. Additionally, US data shows business activity contracted for the first time in four years in February. The S&P 500 and Dow are both down about 3.4% at the time of writing.

FINSUM: The virus is now no longer contained to China, with Italy sporting 150 cases and three deaths. Chip companies, travel and tech are getting hit the hardest.

(Washington)

The terrible, no-good, hated first version of the DOL Rule could be on its way back. While most advisors are aware that many of the Democratic candidates want to bring back the old version of the rule, one big surprise came out this week—even Mike Bloomberg explicitly says he wants the rule reinstated. That comes as a bit of a shock because he is seen as the most moderate candidate (he was a Republican while mayor of NYC!).

FINSUM: There is a huge amount on the line for the wealth management industry in this upcoming election. Not only will taxes likely change drastically, but the regulatory environment may shift radically.

(New York)

Fixed index annuities can be an ideal investment if you are looking for a mix of upside gain and downside protection. Many annuities in this category allow a range of choices that mean investors can get much of the upside of an index and still combine it will downside protection. A couple good examples include Lincoln National’s OptiBlend 5 and Delaware Life Insurance Company’s Retirement Stages 7 Fixed Index Annuity. For instance, Lincoln’s offering allows investors to choose exposure to the S&P 500 or the Fidelity AIM Dividend Index and holders can change their allocation each year. Holders can receive a percentage portion of the upside of each index (i.e. up to 35% from the S&P 500 and up to 89% of the AIM Dividend Index).

FINSUM: FIAs can provide a nice mix of benefits and peace of mind, but it is key to remember that the cost of that protection can be quite high.