Annuities have received a lot of bad press recently, and much of it for good reason. Life insurance agents and securities brokers often foist annuities upon their clients without properly explaining them or ensuring that the annuities fit their clients’ needs. For more information refer to Top Financial advisors
Why? Because annuities typically pay handsome commissions to the salespeople. But does this mean that annuities are always bad? Given the right circumstances, fixed annuities and variable annuities could be the right financial vehicle for you.
What Are Annuities Anyway?
Annuities are life insurance products designed to provide supplemental income, mostly for retired people. The term “annuity” literally means “annual payment of allowance or income.”
Basically, annuities tend to work like this: Someone pays a set monthly premium, as with life insurance, for so many years. Then, when he’s done paying, he waits for a while. A few years later, he begins receiving monthly income.
The amount he is to receive, usually for the rest of his life, is generally much greater than the total amount of premiums he paid in.
Fixed Annuities – The Original Version
Fixed annuities work much like the example above. The key thing is that with fixed annuities, investors are guaranteed a set pay-out. Almost no other investment product guarantees anything, and that’s why fixed annuities are actually a form of insurance, not securities.
The big problem with fixed annuities is inflation. While the money you pay in premiums is generally less than you’re guaranteed to receive, when you adjust for inflation, you might be losing out. This is one of the reason annuities have gotten so much bad press recently.
Variable Annuities – New and Improved?
Variable annuities protect you against inflation risk by investing your premiums more aggressively. The downside? While variable annuities guarantee lifetime income, they do not guarantee how much that income might be. In fact, you could even lose money by investing in variable annuities.
For this reason, many of the more ethical financial advisors recommend that you buy a modest life insurance policy and invest the premiums you save into solid mutual funds.
To Be Fair – The Upside of Annuities
Theoretically, annuities could be a great investment vehicle. Rather than “throwing away” life insurance premiums, annuities can provide for a death benefit while simultaneously allowing your money to grow.
Also, when compared to mutual funds, annuities offer several advantages. For one, the money you invest grows tax deferred. This means that you will not be required to pay income tax on the funds invested into an annuity until you begin withdrawing money.
Go to Registered Financial advisors for more information.
Secondly, variable annuities do guarantee lifetime income, while theoretically at least, you could lose all of your money invested into mutual funds.
In practice, this is unlikely, but at least with an annuity you will be able to plan for the worst case scenario of a guaranteed lifetime benefit. The worst case scenario for mutual funds is $0.
Mutual Funds and Variable Annuities – A Side-by-Side Comparison
Maximum sales load: Mutual fund, 8.5 percent; variable annuity, no maximum. This means that unethical brokers can charge unsuspecting clients any sales charge that they want.
Pricing: Mutual fund, net asset value (NAV) calculated once per day; variable annuity, unit value calculated once per day. Mutual funds have the major advantage of being liquid – you can buy or sell them any business day of the year. A variable annuity is a life insurance product and is not liquid at all.
Share value: Mutual fund, depends on performance of the fund; variable annuity, depends on the performance of the “separate account,” in which a portion of premiums paid are invested.
Make Sure That Your Financial Advisor is Looking Out for Your Interests
If you feel that your financial advisor is more concerned with her own commission revenue than your financial well-being, head for the door and never look back.
Financial advisors are supposed to be professionals, not cheap salespeople. Like doctors and lawyers, their duty is to those whom they serve, not to the company that employs them or to their own paychecks.
Older individuals are especially susceptible to hotshot young brokers who think they can score a quick buck by unloading a junk product with a big commission.
Your best defense against this is to become as fully educated as you can about each investment product that’s recommended to you, and to find a financial advisor with references from people you know you can trust.
A Few Questions to Ask Your Advisor
If you’re ever dubious of a product your advisor is recommending, be sure to ask him how much commission he receives for selling it. Come right out and ask if he would recommend the product if the commission were half or one-third what it is.
Ask him what are some products that he recommends that do not provide such high commissions. And if you really want to rattle your advisor, ask him what score he received on the Series 7 exam. Ask him to show you his certificate proving his score.
Tell him that you’re considering a variety of advisors, and these are the criteria you’re using to determine which one is right for you. It’s important that he remembers that you are his boss, and that he is to put your interests ahead of his own. That’s what being a professional is all about. Visit Certified financial advisors for further information.
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An expert advisor is simply a piece of code written in the MQL4 programming language which, once installed on your MetaTrader 4 Forex trading platform, has the ability to automate the opening and closing of trades on your behalf. It is a piece of code that includes a set of rules based on what, how and when to trade. It also allows you to adjust stop loss, take profit and trailing stop levels according to pre-defined parameters. Refer to Top Financial advisors for further information.
Every expert advisor is different. Every expert advisor – its own animal. But they all serve the same purpose: to eliminate inconsistency – a fault that characterizes most traders.
How An Expert Advisor Works
Once installed and enabled to run, an expert advisor will usually first check if there is enough equity in your account to open a trade. If there isn’t, it won’t run.
If there is enough equity in your account, the expert advisor will on each tick of the currency pair(s) that it is assigned to trade on, run through it’s rules and codes and verify that the trade entry criteria have been met. Alternatively, if open trades already exist, it will check that an exit (stop-loss or take-profit) criteria has occurred. If it has, it will automatically exit the trade for you.
To work, the computer that is running your expert advisor (and trading platform) must be kept running all the time while the forex market is open. If you ensure that your computer is running 24×5 – all you have to do is sit back, relax and let it do its thing!
Programming a Strategy Into The Expert Advisor
An expert advisor can be designed to trade many different strategies. They can include grid strategies, hedging strategies, martingale and reverse martingale strategies, trend following strategies, correlation strategies – you name it. Additionally, you can choose to combine one or more strategies together.
Forex expert advisors can trade breakouts, news announcements only or they can be scalping expert advisors which aim to secure small profits as soon as they are available. An expert advisor can be programmed to do whatever you like – the possibilities are truly limitless. Go to Registered Financial advisors for more information.
Classic expert advisors look to trade bounces off of support and resistance and reversals. They enter trades when a high probability setup looks like occuring. Many expert advisors come with trailing stop losses – a feature which helps you lock in profits.They can also be programmed to monitor market conditions for reversals and then close your trade immediately when these conditions are met to lock in profits as well.
More advanced expert advisors can trade multiple pairs simultaneously or monitor multiple time-frames at once, giving you a wide range of options in picking a market trend – something that would take you hours if you had to do it manually.
The type of expert advisor you choose to trade with should sit well with your overall trading style. Playing around with its risk-settings while it is trading live will give you a better feel for what it does well and you will learn it’s characteristics better. If you understand what it is doing, you will have more confidence in it to ride out a bad performing patch while you continue to monitor and play with its stop-loss and take-profit levels.
While the point of forex expert advisors is to automate your trading decisions and improve trading consistency by taking emotions out of your trading, you still must pay attention to what the expert advisor is doing. This is especially relevant if your expert advisor is automatically set at a wide stop-loss of say 100 pips or more.
Conclusion
Understanding the strengths and weaknesses of your Forex Expert Advisor is paramount if you intend to trade with them in live market conditions and with real money. There are various different types of Expert Advisors available today for the Mt4 platform and they are restricted only by the creativity of the programmers who design them. Visit Certified financial advisors for more information.
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What is a high net worth investor? I can share with you who isnt: me!
However, by definition, a high net worth investor is anyone who’s personal net worth is more than $5million. Not surprisingly, this is one of the fastest growing client types in North America which provides some amazing opportunities for many companies who are willing to provide veryhigh levels of service. This typically entails a lot of hand holding, often though, the compensation is normally well worth it. If you provide financial services and want to target this demographic, you should focus as much on your relationship with this type of client as the type of investments you’ll seek for them.
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Everyone has some kind of stock account these days. People have retirement accounts, vacation accounts, investment accounts, and trading accounts to name just a few of the types of accounts people trade day trading ideas in. While some retirement accounts you don’t really have a choice of where its held, especially if through an employer, all the other accounts you do have this ability.
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