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Conservative Investing Raises Questions For The Long Term

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Conservative Investing Raises

Questions For The Long Term

People do need to invest to reflect their own risk profile, says John Fenton, a principal with Tillinghast in the Atlanta office. But those who want to invest conservatively in a variable product should be careful, he says.

For instance, if they seek out bond subaccounts, they might do the same thing that investors in the 1990s did, Fenton says. That is, they may be “chasing the hot performers at the wrong time.” Bonds still carry some risk, he adds, and the returns may not be as high as desired.

Money market accounts arent ideal either, he indicates. They had a net return last year of only 0.5%, Fenton says.

“Conservative investments in variable products just dont work as well over the long term,” he maintains.

“The producer needs to know this and remind the customer of this. The real issue for consumers today is, no one knows what will happen.”

–Linda Koco


Reproduced from National Underwriter Edition, April 28, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.



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