Ask a Fool: What Do You Think About Annuities?

Worldwide Invest Better Day 9/25/2012

Today, Motley Fool senior analyst Robert Brokamp answers the question: What do you think about annuities?

Though the Foolish reader who asked this question mentioned that The Motley Fool hates annuities, it's not true! In fact, Robert thinks these insurance contracts have very valuable application for many investors. The regular payments you get each year for the rest of your life are safer and more consistent than dividends, which can fluctuate with certain swings in the market.

Take Annaly Capital, for example. Because the company pays out 90% of its earnings by law, weaker earnings mean lower dividends than investors may have been counting on, such as when the company recently cut its yield by $0.05 per quarter.

See more in the following video.

Click the big green button to join the thousands of people celebrating Worldwide Invest Better Day on Sept. 25!

Robert Brokamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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