Sep 30 2008

Bring Back the Sunshine…Please!

“If you are going through hell, keep going.” – Winston Churchill


As I have mentioned in previous posts, I am the type of person that prefers to look at the bright side of most situations.  This is not to suggest that I don’t see the challenges, but I normally won’t let obstacles or setbacks derail what I am planning or working towards.  Throughout my life I have always looked forward to a better future with more opportunities for myself and my family.  Now for the first time, I am beginning to wonder if I will be able to maintain the positive momentum that I have enjoyed for so long.  This forces me to consider that many of us have been very fortunate to live in relatively stable societies where we can take career and financial success for granted.  Our parents and grandparents dealt with The Great Depression, world wars and the Cuban Missile Crisis.  For many of us born over the past fifty years, 9/11 was the first major event that forced us to pause and recognize how vulnerable global stability truly is.


Suddenly it feels like every week brings more disturbing news and I am beginning to feel like the whole world has just entered a dark tunnel with no obvious opening at the other end.  This begs the question – when should we expect the global economic environment to get better?  I don’t have any inside information here, but my gut tells me that collectively we are still trying to figure out how bad it really is.  Until we do, we can’t expect to know how long before it gets better.


It baffles me somewhat that Henry Paulson and Ben Bernanke are convinced that $700 billion (plus $85 billion for AIG) will be enough to fix this massive financial disaster.  According to Stephen Lendman of the Baltimore Chronicle & Sentinal, “A $700 billion bailout (called the Emergency Economic Stabilization Act of 2008 – EESA) is just a down payment.  Trillions will be needed in the end.  Other nations contributing to help.  The problems are deeper and more intractable than anyone expected.  Before this ends, unimaginable amounts of capital will be written off.  Too much to even contemplate.  Bad investments contaminating good ones.  Threatening world financial structures with paralysis.  Severe economic damage to their economies as a result.”  Hopefully it isn’t quite this bad, but we know it isn’t good!


I certainly don’t like the idea of bailing out the greedy and foolish executives on Wall Street that were responsible for this mounting financial disaster, but I definitely don’t want to experience first hand what it feels like to live through a great depression either.  For this reason, I hope Congress passes the bailout and it works as well as Mssrs. Paulson and Bernanke have promised it will!

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Sep 28 2008

Safe with Upside

Published by under Investing,US Economy

“Men at some time are masters of their fates: The fault, dear Brutus, is not in our stars, but in ourselves, that we are underlings.” – William Shakespeare from Julias Caesar


Suddenly I am asking myself if I have been abducted by a cruel supernatural prankster and placed in Bizarro World! Unbelievable…the run-up to the U.S. presidential election and the national political landscape looks more like a really bad reality TV show. Legendary Wall Street firms have either collapsed in the last two weeks or are on life support praying for an extensive government bailout. Americans that have been cast out of their homes due to foreclosure are moving into tent cities in various parts of the U.S. Iranian President Mahmoud Ahmadinejad anounces, “American Empire in the world is reaching the end of its road” in a speech to the United Nations General Assembly. I could go on but I don’t want to push anyone over the edge. In case you haven’t noticed, these are crazy times (really – I’m not kidding here). I for one long for the good ole days when everything felt so secure and the future seemed so promising. It wasn’t long ago that my biggest problem was finding enough time in my schedule to take an exotic vacation with my family!


I suppose what really chaps my butt more than anything is the fact that this whole mess could have been largely avoided – if only the brilliant minds on Wall Street and the government (probably not as bright) would have applied basic common sense. Hank Paulson summed it up well when he said, “I share the outrage that people have. It’s embarrassing to look at this. I think it’s embarrassing to the United States of America. There is a lot of blame to go around.” Personally I’m embarrassed, disgusted, angry and a little scared – how about you?


Enough already. It’s time to offer some useful information. After changing companies a few years ago, I had the option of keeping my money invested in my previous employer’s 401(k) plan or transferring it to another plan or IRA. Being the risk averse person that I tend to be – especially considering the economy and the wild swings in the stock market over the last two years – I was looking for something with a good chance for growth and limited downside risk. The other major consideration was the amount of time before I plan to retire. I am looking at 20 to 25 years, and although I am willing to suffer some losses here and there, I don’t want to finish with less than I started with and I want a reasonable chance for my investments to perform as well as the S&P. With my investment advisor’s assistance, I feel like I found exactly what I was hoping to find. I am referring to the MassMutual Transitions Select Variable Annuity with the guaranteed minimum accumulation benefit. I selected the MML Growth Allocation which means that if the market performs reasonably well, I stand to see growth of three to five times my original investment over a 20-year-period, but at the very least, I am guaranteed twice my initial investment after 20 years. MassMutual offers various other or additional riders, but you get the idea.


I have previous exposure to MassMutual and have often asked others about their experiences. To date I am pleased to report that I have never personally uncovered anything to be concerned about. I am not suggesting you should do anything without careful analysis and consideration, but you might want to look into this option. As we seem to learn over and over, there are few sure things in life, but this annuity can provide the best of both worlds – no real downside and the opportunity for significant growth. Let me know if you have other suggestions. I would also like to hear about your experiences with MassMutual (good or bad).

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