Best Long-Term Investment Strategies

Hi there, Stan The Annuity Man, America's annuity agent, licensed in all 50 states. Today, we’re talking about the best long-term investment strategies. You’re probably thinking, “Wait a minute, Mr. Blue Tracksuit, dude, Mr. Stan The Annuity Man, you’re talking about long-term investment strategies?” Yes, I can do that. I have the pedigree to do that, so let's dive in.

Long-Term Investment Strategies: A Different Perspective

So, we’re talking about long-term investment strategies. I had Terry Savage on my podcast, Fun With Annuities. Terry Savage, known as the “Money Lady” and one of the founding members of the Chicago Board of Exchange. She is royalty when it comes to investment advice. On the podcast, she discussed long-term investment strategies and the historical success of stocks. Looking at the S&P 500 returns, if you had bought an S&P 500 index fund, say from Vanguard or Fidelity, with a buy-and-hold approach, long-term, things tend to work out.

Now, I have to say, I’m not licensed to do that anymore. I’m Stan The Annuity Man, and I specialize in annuities. That’s what I do. But I used to work for firms like Dean Witter, Paine Webber, Morgan Stanley, and UBS, managing large amounts of assets. So, I do understand stocks, bonds, ETFs, and putting together portfolios. This background makes me different from most people selling annuities, as they typically lack experience with investments and managing markets over decades.

Annuities: The Long-Term Investment You Need

Anything long-term can be good from a buy-and-hold standpoint. We’ve all heard the stories where someone bought a stock and just forgot about it, and it rose over time. However, today’s markets are different. They’re 24/7, 365 days a year. They're global and interconnected, and it’s very popular to be a trader. We read about hedge funds, private offices, family offices, and all these so-called masters of the universe. It’s intriguing. Everyone wants to maximize their portfolios.

But when discussing long-term investing—whether in real estate, stocks, or anything else—annuity products often don’t get mentioned. In my opinion, the ultimate long-term investment is your life expectancy. How long are you going to live? That is the true long-term.

The Importance of Annuities for Long-Term Planning

As long as you’re breathing, life expectancy is your longest term. Once you’re gone, you’re gone. But let’s get back to annuities. If you say, “I hate all annuities,” you already own one. It’s called Social Security. It's the best inflation annuity on the planet. And if you’re lucky enough to have a pension from the government, a state, or a company, that’s an annuity too—a lifetime income stream based on life expectancy.

So, it’s time to start thinking about annuities as long-term investments, especially regarding lifetime income. There are four products that solve for lifetime income:

• Single Premium Immediate Annuities (SPIAs): For income that starts immediately.
• Deferred Income Annuities (DIAs): For income starting at a later date.
• Income Riders: Attached to Fixed Indexed Annuities (FIAs) or Variable Annuities.
• Qualified Longevity Annuity Contracts (QLACs): Using IRA assets for future pension income needs.

You can go to my site, The Annuity Man and run quotes for these annuities. You can check how much a lump sum would pay out or reverse-engineer the amount you need to create a specific monthly income. These are long-term plays. Annuities aren’t technically investments—they’re contracts. But you’re investing in the annuity company by transferring the risk to them to provide the contractual guarantee you’re seeking.

Understanding PIL: The Key to Annuities

I have an acronym called PIL that explains the purpose of annuities:

• P: Principal protection
• I: Income for life
• L: Legacy
• L: Long-term care or confinement care

You may not need an annuity if you don’t need to solve for one or more of these four items. I ask everyone I speak to: “What do you want the money to contractually do, and when do you want those contractual guarantees to start?”

By answering these two questions, we can determine if you need an annuity and, if you do, which type is right for your situation.

The Role of Annuities in Your Portfolio

At the time of this taping, most people are either:

• Trying to protect their principal, such as buying a MYGA or FIAs for principal protection and CD-like returns.
• Trying to solve for lifetime income, which is the unique monopoly that the annuity category has. Annuities are the only product type that will provide income as long as you are breathing.

There’s no real ROI until you die. This isn’t just a catchy phrase—it’s the truth. The return isn’t realized until your death, but until then, it’s a pure transfer of risk.

The Importance of Lifetime Income Annuities

So, do you need everything in annuities? No, of course not. You need a well-allocated portfolio that fits your situation and risk tolerance. Remember, annuities are risk-transfer products. You’re transferring the risk to the annuity company to solve for principal protection and lifetime income, with options for legacy and long-term care.

With 10,000 baby boomers retiring every day, people are looking for lifetime income solutions. Most people have defined contribution plans (401(k)s, 403(b)s, 457s, etc.), and they need to turn some or all of that into a lifetime income stream. Very few companies offer defined benefit plans (pensions), so you may need to consider annuities as part of your solution.

Annuities as Personal Pensions

In the past, pensions were common, and you’d get a gold watch after retirement. Today, that’s not the case. You need to create your personal pension with a lifetime income annuity. It’s retirement income insurance—it’s a lifetime income insurance policy. Do you have that? Are you prepared for inflation?

When we talk about long-term investing, we need to start talking about lifetime income annuities as part of that strategy. They can provide you with the security to enjoy the life you've worked hard for.

Conclusion: Taking Action

So, when we talk about long-term investing strategies, consider annuities as part of the conversation. You don’t want to run out of money in retirement and deserve to live the lifestyle you’ve worked for.

Go to The Annuity Man, run quotes on our proprietary calculators, grab my free book, and schedule a call with us. Don’t forget to listen to my Fun With Annuities podcast, where we bring in some of the best experts in money and retirement.