Are Safe Investing Guarantees on your Investments a Good Deal?

All you ever wanted, was a safe place to park what little money you've been able to eke out. You have your child's education, and your retirement think about, and you have nothing altogether adventurous in mind for your money. All you want are some safe investing opportunities, and to get by. Well, as people who've been tossed about like a cork on stormy seas by the Great Recession, and who have seen their portfolios drop by maybe 6% in value in the process recently, finding out exactly what it takes to be immune to these market swings, has become quite an obsession. What they're discovering now, is that safe investing is possible, but only at a price.

Not to blame the companies that offer these; any kind of income guarantee or downside protection in this market with poor interest rates and unpredictability to boot, becomes really expensive for them to support. And anyway, it's like getting blood out of a rock getting Wall Street agree to these safe investing opportunities in the first place. If they do it at all, they are going to get you to accept lower returns for the privilege. So what is an ordinary family investor to do? Short-term money market funds just became virtually unprofitable. You'd be lucky if you could get 1% on a CD you left with them for six months.

So, safe investing enthusiasts look to Variable Annuities. You know what those are, don't you? They are just your average bonds and stock, but they insure them for you to make sure they don't fall in value. These are not as good a deal as they used to be. The insurance companies used to offer really generous insurance guarantees before, and did they ever regret it when the markets went belly up. Another option is the mutual fund market, but it comes with guarantees, not unlike what you see in those annuities. You just pay them a fee (not a cheap one), and they guarantee you a certain income for life. You could also try the stable-value funds. These are the best for a place to park your 401(k) money. They guarantee that you will keep your capital, and over a long period time, you get steady raises in value.

The thing is, people are so sick of seeing their money disappear before their very eyes, that there is such demand now for these safe investing opportunities. With so much demand, it's no longer a buyers market though. Just last year alone, investors threw nearly a half-trillion dollars at these conservative investment products. Why would Wall Street even want to make things more profitable for you? People can't have enough of these, even when they get these terrible deals on them.