by John Darer CLU ChFC MSSC RSP
Still feel comfortable putting your settlement money in the stock market?
Today's headlines from CNBC
- Dow Down 4% after brutal sell off
- Dow Jones Industrial Average has dropped 6.7% from its 52 weeks closing high on January 19, 2010
- S&P 500 has dropped 7.6% from its 52 week closing high on January 19, 2010
- Nasdaq biggest one day drop since October 1, 2009
- Silver Futures down 5%, lowest since June 2009
- Gold Biggest Drop since December 2008
- Oil Futures Down 5%
A few memorable lines from Tim Rice and Andrew Lloyd Webber's dying protagonist Evita, frame the obvious question:
"Where do we go from here?
This isn't where we intended to be
We had it all, you believed in me
I believed in you
What do we do for our dream to survive?
How do we keep all our passions alive,
As we used to do?"
HOW WOULD YOU FEEL ABOUT THIS?
Using the S&P 500 as an example, on $1,000,000, a 7.6% loss meant a loss of $76,000 in 3 weeks!
Using the Dow as an example , on $1,000,000,a 4% loss meant a loss just today of $40,000?
Are you mentally prepared for that?
Were you mentally prepared for that?
STRUCTURED SETTLEMENTS PROVIDE A GUARANTEED OUTCOME FOR YOUR INCOME
I disagree with "Evita Peron" on one point, in the case of structured settlements, certainty generally doesn't disappear.
Think about this:
- You can have your structured settlements funded with a specially customized annuity (or annuities) from an insurance company with over $300 billion in assets like New York Life Insurance Company which has been providing financial security for 165 years and has weathered numerous national and global financial crises. More recently New York Life insurance Company weathered the financial storm of 2008 with no drop in its highest ratings from AM Best, Moodys, Standard & Poors or, Fitch.
- Alternatively, or in conjunction with the above in #1, you can have your structured settlements funded with United States Treasury obligations, currently rated AAA. If you have concerns about inflation such United States Treasury Funded Structured Settlements can be funded with Treasury Inflation Protection Securities (TIPS).
- And, if you want there are other large regulated insurance companies, with similarly long histories to help protect your income and longevity risk. You can also diversify across a number of companies and between annuities and TIPS.
- No structured annuity issuers have been taken over by a state insurance regulator during this financial crisis.
- Compare this to banks. While banks have FDIC protection on deposits (subject to certain limits), think about how many banks have failed in the last 3 years.
WHY GAMBLE IF YOU DON'T HAVE TO?
**opening stanzas from "You Must Love Me", Evita, Andrew Lloyd Webber and TIm Rice