There are good annuities out there, though hard to find. I think 30% of your portfolio should be in annuities of the type that do not go down, i.e., cannot go down except for fees. My fixed index annuity from Allianz has a 1.05% fee per year. It has averaged just over 7 percent growth each year...i.e., some years it is up 12% or more, others, when the market is down, it stays the same except the fee is deducted. With fees, the annuity has averaged just over six percent each year and I have had it for eight years. Allianz has started raising the spread each year on my index, so my profit may not be quite this good in years to come but I sure do sleep well at night knowing it cannot go down.
My plan: 30% in annuity, 40% owning my own home (real estate), 40% in equities (stocks, ETFs, etc.). That means the market going down 50% hurts my net worth by 20%.
The best equity fund I have is Allianz Income and Growth - a great, great fund with nearly seven percent ***distribution*** (declared cap gains, dividends, etc.) each year. Its dividend is not seven percent. Sources like Morningstar don't include distributions in yield (Morningstar only includes dividends when it lists yield for some reason), thus most people do not know about this fund because the dividend portion of its yield is small. I never sell shares in this fund, I take out the seven percent distribution each year (I don't reinvest) and I am still up almost 20 percent from where I bought in. I do not think the share price will go higher but I feel confident the distribution will continue. (It only holds 6 percent of my net worth - I do not put too much money in any one fund).
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