Investment Vehicles

The investment products you choose are only the means to an end: the attainment of your investment goals. What really matters is the sound reasoning behind these product choices. The rewards and the risks of investing can be considerable.

And, there's such a diversity of investment products that decision-making can be difficult. Investing wisely requires experience, and many people don't have the experience to make important investment decisions alone.

So, inertia often sets in and opportunities are lost.  A trusted advisor can help you sift through information, simplify decisions and move forward with confidence in your investment strategy.

If you want to pass an asset down to the next generation, life insurance can be a valuable investment vehicle.  If you want to diversify a portfolio for income and growth, annuities and mutual funds can be beneficial investment options.

The key is to understand your objectives and know your risks.  The market is always changing, but at F.R. Owen & Associates, our commitment to your investment goals will never change.

Annuities

"Annuity" comes from the ancient Greek word "annus" (year), and refers to annual income payments.  Annuities have evolved from early contracts that guaranteed a return of principal and a fixed rate of return over the life of the purchaser to contracts that can include features such as checkbook access, bonus rates, guaranteed death benefits, living benefits, etc.

All annuity contracts may be purchased with a single payment or a series of payments over fixed time intervals.  Contributions earn tax-deferred interest until withdrawn.  Consult your tax advisor to find out if your payments are tax deductible. There are several types of annuities available. Such products may carry surrender charges for redemptions in the early years of the contract. The application of these charges may cause redemption values to be less than the original investment amount.

Fixed Annuities

With fixed annuities, money is pooled in the general assets of the insurance company and typically invested in government bonds, corporate bonds and first deeds of trust.  Fixed annuities are comparatively low-risk because your money is not invested in the stock market,.  The predictable and guaranteed results of fixed annuities appeal to conservative investors.

When evaluating these contracts, it is important to examine the interest history of the company and determine if the rate guarantee matches the surrender penalty.  Any guarantee is based on the claims-paying ability of the issuing insurance company.

Another form of fixed annuity is the indexed annuity. This contract bases its return to an index, generally the S&P 500, and allows investors to capture a percentage of the market's performance without risking their principal.

Indexed annuities, while attractive, should be considered carefully. The multitude of terms such as monthly averaging, participation rate, cap and crediting methods are important to understand.  An F.R. Owen advisor can help you detemine how these contracts apply to your investment strategy.  Such products may carry surrender charges for redemptions in the early years of the contract. The application of these charges may cause redemption values to be less than the original investment amount.

Variable Annuities

With a variable annuity, you determine which investment options are most appropriate for you.  Your money is then invested in professionally managed portfolios. Your annuity's value will vary over time, according to the performance of the investment options you choose. 

A variable annuity also provides valuable death benefits.  This helps protect your beneficiaries if you die before receiving income payments from the annuity.  However, it's important to remember that variable annuities are subject to potential loss of principal and early withdrawal penalties including surrender charges and a 10% tax penalty for withdrawals made before age 59 & 1/2.

Other mandatory fees can also apply to most variable annuities, including mortality risk and expense risk charges, administrative and records maintenance charges and sub-account expenses. 

Optional fees can apply to certain features a purchaser chooses to buy, such as guaranteed minimum income (GMIB), guaranteed minimum accumulation (GMAB), guaranteed minimum withdrawal (GMWB) and stepped-up death benefits.

While it's important to comparison shop these mandatory and optional fees, it's also important to weigh all the angles of each variable annuity and feature, not just their cost.  You don't want to pay for features you don't need, but certain features and protections may be worth paying for in your particular situation.

An experienced F.R. Owen advisor can help you make variable annuity choices that enable you to balance fee cost and stay invested even during turbulent markets or times in life.

Mutual Funds

A mutual fund pools money from many individual investors with similar investment objectives.  Professional money managers invest the pool in a variety of securities including stocks, bonds, other mutual funds, closed end funds and exchange traded funds. 

Most funds have a particular investment strategy.  Some focus on Blue Chip companies that are relatively low-risk and reliable income producers.  Others focus on high-risk start-up companies with potential for impressive capital gains. 

Some mutual funds balance attributes and risk factors across diverse investment opportunities.  Finding a mutual fund that fits your investment criteria is important. 
A fund's past performance is also important.  

We offer one of the largest selections of mutual funds available -- over 2,500 funds from over 100 fund families.  But, more importantly, we offer the experience to help you evaluate and choose mutual funds that meet your investment goals.

Click here to learn more about other investments.