Jim Cramer

Posted by Ray on July 6, 2009 under Annuity News, cnbc, Main | Be the First to Comment

OK, there are lot’s of things we could say about Mr. Cramer, but you know what I kind of like what he does. Before you get the wrong impression I do think he is dangerous and makes some bad calls, i.e. the housing bottom, but he does get people interested in stocks which is a good thing.

Even though I strongly disagree with most of his views he brought up an interesting idea tonight. He says that the government should issue a 30 year bond paying 5% which he shamelessly called the Cramer Bond. The general idea is interesting, but who would give the government money for 30 years only to receive 5%? Now, he did say make it tax free, but still that is betting that inflation will stay below 5%, which it really has never done.

He says you will double your money after 14 years, plus a few months, and they should be offered directly to the public with no fees. All good ideas, but Jim a product already exists like that.

There is a product that is rated AA that guarantees to double your money in 10 years, without taxes until you withdraw the funds. It is not right for college planning, but it is perfect for retirement planning. Not only that it allows you to participate in the market and you could, potentially, do much better than a simple doubling of your money. You have different investment options and a guaranteed fixed account, sounds better than 5% doesn’t it?

There is a catch, there are fees and you have to buy it through a broker. What is it? It is a variable annuity with living benefits. You can choose a guaranteed minimum account balance option or a guaranteed income benefit, but nonetheless it is better than your proposal. I know it is not as sexy as a high tech stock or some other off the wall investment, but it meets the needs of investors, period.

Say what you will about annuities, there simply is no other investment that can do what they do. Yes, you will take a risk through both investments, but that is mitigated through guarantees, but also the risk of the insurer. However, I feel much better about insurers risk than I do about the massive debt being issued by our government. Not only that, inflation will be an issue so 5% is not good enough.

Good idea, one of your better ones, but as usual you miss the obvious. I cannot wait until I get the tell all book written by one of your employees. Should be an interesting read!