Want ‘Diamond Hands?’ Buy An Annuity! – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Top Stories
Topics
    • Life Insurance
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Content
    • Webinars
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
  • Insider
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
From The Field Exclusive News
Top Stories RSS Get our newsletter
Order Prints
August 31, 2021 Top Stories No comments
Share
Share
Tweet
Email

Want ‘Diamond Hands?’ Buy An Annuity!

Are Americans able to achieve financial security?
By John Neumann

The meme culture has produced a new class of investors and some important lessons for financial advisors and their clients. The Reddit crowd is seemingly unfazed by extreme volatility in stocks like GameStop or AMC because of a cherished talent they call “Diamond Hands.”

Diamond Hands is the ability to stomach all of the risk, losses and drama surrounding their equity position in an effort to get to an end goal. Most investors, however, don’t subscribe to the you only live once (YOLO) lifestyle.

Each year, Dalbar publishes its Quantitative Analysis of Investor Behavior. This report shows how individual investors consistently underperform the market. The statistics in the analysis point to what a Wall Street Bets participant may label as having “Paper Hands.” This individual is the opposite of someone with Diamond Hands. They have the same end goal but just can’t stomach the volatility.

To be successful, our clients need sound investment strategies and the confidence to stay invested. This is especially true for those in or nearing retirement. After all, members of this group no longer have the earning capacity required to overcome a poor investment decision.

According to LPL Research/Fidelity Investments, nearly one-third of investors over 65 years old sold all of their equity holdings between February and May of 2020. During the height of uncertainty over the pandemic, many seniors panicked, turning fear of missing out (FOMO) into OH-NO.

The consequences of the emotional buying and selling that’s done in up and down markets grow exponentially as we age. The question to ask ourselves is, “What should we do about it?” A simple solution to this complex problem can be found in the fixed annuity marketplace.

Balancing the risks of an equity portfolio with the guarantees that can be offered in an annuity can make a world of difference to your clients’ attitudes toward risk. To the moon? Not quite, but there’s no denying the power of just knowing. Knowing a portion of their income could be guaranteed for life.

Knowing some of their portfolio returns could be guaranteed. Knowing a certain amount of their nest egg may never go down. Just knowing can allow clients to sleep at night, think long-term, and reduce the cost of panic.

In today’s rate environment, a multi-year guaranteed annuity provides a compelling alternative to traditional safe investments. Fixed indexed annuities are more robust than ever, with many offering enhanced participation rates, a lifetime income stream, and the potential for future increases to help keep up with inflation.

Single premium annuities and deferred immediate annuities can be structured in any number of ways. Remember the primary pricing mechanism for immediate annuities is your clients’ life expectancy with interest rates playing a secondary role. These mortality credits make a huge difference for clients looking to maximize their cash flow in retirement.

The best thing we can do as financial professionals is to make sure our clients’ portfolios are structured to help them weather any storm. Adding a layer of certainty, by transferring risk to an insurance company with an annuity, helps provide peace of mind to your clients, and stability to your book of business.

John M. Neumann, CFP, ChFC, CLU, CRPC, is an annuity wholesaler with Crump Life Insurance Services. He may be contacted at [email protected]. 

© Entire contents copyright 2021 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

 

Older

Colorado Leads The Nation In Auto Thefts, NICB Reports

Newer

The Need For Life Insurance Has Never Been Greater

Advisor News

  • Here's one reason why America's racial wealth gap persists across generations
  • Ken Morris: Before you retire early, ask yourself a simple question
  • Half of Kansans have no retirement savings. This statewide program is a no-brainer
  • Savvy Senior: How to choose a 55-plus active adult community
  • Sinema took Wall Street money while killing tax on investors
More Advisor News

Annuity News

  • Colorado adopts new annuity sales regulations
  • National Western Life introduces new fixed indexed annuity, NWL New Frontiers
  • Jackson National announces second quarter 2022 results
  • Brighthouse Financial adds to Shield Level annuity suite with new product
  • Prudential FlexGuard reaches $10B total sales milestone at record pace
More Annuity News

Health/Employee Benefits News

  • EDITORIAL: Inflation Reduction Act is stealing Medicare dollars
  • UnitedHealthcare introduces new business unit Surest
  • Texas lawmakers ask feds to reconsider Medicaid expansion proposal
  • Plan to help poor Mississippians with health insurance stripped from latest federal bill
  • Giannis Antetokounmpo invests in telehealth company
More Health/Employee Benefits News

Life Insurance

  • Alex Murdaugh petitions to delay Mallory Beach trial amid murder charges
  • Sales of life combination products rebound in 2021, LIMRA reports
  • Integrity Marketing Group acquires Richman Insurance Agency
  • How to get the most out of Life Insurance Awareness Month
  • Life application activity down in July, MIB Index reports
More Life Insurance

- Presented By -

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

FEATURED OFFERS

Get Linked INN to your industry Connect with INN on LinkedIn to be first on all the news and insights that matter to your industry.

Press ReleasesAll press releases

  • National Western Life introduces newest fixed indexed annuity, NWL® New Frontiers
  • CybeReady Supports Security Defenses with CISO Toolkit
  • Life and Disability Income Insurance Products from MassMutual Now Available on iPipeline®’s End-to-End Digital Platform
  • Business on the Go with The Crump Mobile App
  • iPipeline® Provides Advisors Excel with Unified Path Toward Accessing Core Data Analytics in Financial Services
Add your Press Release >

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Content
  • Webinars
  • Monthly Focus

Top Sections

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2022 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.