China's World Domination Has Already Begun

This is
G&G Associates Tax & Financial Consulting
e-Newsletter

China's World Domination Has Already Begun

Karibu (Welcome) G&G Readers,

As I sit here at my hotel in Quito, Ecuador after attending this live and
invest seminar the news is the same here in South America. "The Dollar is
in trouble and you best to protect yourself and your portfolio." I can
write until I'm blue in the face, but if you fail to take action it's not
because you haven't had ample warning.

China is gearing up to replace the U.S. as the major financial power on
earth. At the same time, it's quietly making plans to replace the dollar
with its own currency, the Chinese renminbi (a.k.a. the "yuan").

In other words, the dollar's days as a world reserve currency are numbered.

If the dollar lost this elite status, our lives as U.S. citizens would
change dramatically. Not only would the dollar's value freefall, but we
would face terrifying inflation. Everything you buy would cost at least
30%-40% more.

If you haven't seen the video "The Day the Dollar Died," do so ASAP:
http://www.youtube.com/watch?v=2N8gJSMoOJc&feature=watch_response

As you read further, I'll tell you what steps China is already taking to
replace the U.S. - and the dollar - as the major financial power. I'll also
explain why China could be the trade that will make or break your portfolio
over the next decade.

The Chinese Move Quickly Against the U.S.

Last year, I first wrote to you about how China was making strategic
alliances with other nations to cut the dollar out of their trading. At that
time, China made these currency swap agreements with six different nations.
The Chinese quietly signed these agreements with Hong Kong, Indonesia,
Malaysia, Belarus, and then Argentina. Then our very savvy financial
opponents added Brazil, and quickly became Brazil's number one trading
partner.

A currency swap agreement simply means two countries agree to use their own
currencies for trading, without involving the dollar. You see, most
countries convert their currencies to U.S. dollars before trading with any
nation.

But by signing swap agreements, the Chinese discovered a way to effectively
replace the dollar in trading. This gives the Chinese a wider distribution
of the renminbi.
Now the word is Chinese leaders are negotiating with Arab states to create
more currency swap agreements. The rumor is that China wants to remove the
dollar from all oil trades.

That's HUGE folks. It means the dollar is losing its status as the "oil
currency" too.
For the moment, oil contracts around the world are settled in the world's
reserve currency - the dollar. However, Brazil and China cut the dollar out
of their oil trades. Oil trades between the Arab states and China soon won't
involve the dollar either.
Those are two strikes on the dollar as the reserve currency.

At the Same Time, the Yuan Is Quietly Gaining Strength

At the moment, the Chinese renminbi is not a free-floating currency. This
means the market does not determine the renminbi's value like most other
currencies (including the dollar and euro). Instead, the Chinese
artificially manipulate their currency to keep its value low.

It's a huge point of contention between China and the United States. U.S.
Treasury Secretary Geithner likes to blame all our problems on the Chinese's
manipulated currency. (Notice: He wants the dollar to be weaker against the
Chinese renminbi and yet he calls for a "strong dollar.")

Mr. Geithner is wasting his breath. The Chinese will revalue their currency
when it benefits China, and not before. And it's a short-sided crusade at
best anyway. Pushing up the Chinese currency will bite the U.S., not China.

Recently China quietly allowed the renminbi to start appreciating against
the dollar. Slowly, over the next couple of years it will continue to let it
gain in strength.
As that happens, the dollar will weaken.

And the Chinese will also have less use for our U.S. Treasuries, denominated
in sinking dollars. We will lose our biggest foreign investor, who has been
financing our ever-growing $13 trillion debt. Yet another financial blow to
the U.S.

"Give Us Another Reserve Currency!"

The Chinese have made their intentions for a new world reserve currency very
clear.
In 2009, they asked the International Monetary Fund (IMF), for a new world
reserve currency based on a basket of currencies called the SDR (or special
drawing rights).
Then in 2010, China asked the IMF to include the renminbi in this SDR basket
of currencies.

The IMF, which is largely composed of U.S. funding, told the Chinese "No,
not until the renminbi is free floating."

Once again the U.S. tries to flex its muscles to get the Chinese to float
their currency, this time through the IMF. But the Chinese aren't buying it.
Yes, they will allow greater appreciation in 2011. But, going forward, they
won't free float their currency until they are good and ready to do so. If
I were to guess, I would say around 2013.

Introducing the Trade of the Decade

Eventually, the deficits in the U.S. will bring the U.S. dollar down to its
knees. But long before that happens; investors will replace the dollar with
the most logical choice for the next reserve currency. Mark my words that
will be the Chinese renminbi.

As an investor, the best thing you can do to protect yourself is to keep
buying up the currencies that will profit from this major shift in power.
Specifically, all smaller Asian currencies including the Singapore dollar,
Indian rupee and the Australian dollar.
But more than that, I believe just buying and holding the Chinese renminbi
will reward you over the long-term. Now this is definitely a long-term
currency play. In fact, it won't truly pay off until the Chinese allow their
currency to free-float.

But the best time to buy is early, while it's still selling at a discount.

If you are a (G&G Investment Society) GGIS Portfolio member, you are already
positioned to take advantage of the Chinese's rise to power in the currency
market. If you aren't a GGIS subscriber, it's not too late to join.

Again, this war for currency domination has already begun. Make sure you're
investing on the winning side. I believe most Americans are in for a huge
shock in the next few years. Most will lose a lot of money and those who are
prepared are set to make huge gains. The good news is that it is fairly easy
and inexpensive to protect yourself, and even make quite a bit on your
savings as these events unfold.

To find out how to protect yourself and profit from China's move on the
market. sign up today to become a G&G Investment Society (GGIS) today.

---------------------------------------

Black Awareness Month Special: Sign up for a Lifetime (GGIS) Subscription
and you'll get a 50% discount "FOR LIFE" on getting your Taxes Prepared
through G&G Associates.

When you take a no-risk, trial subscription to my flagship service, called
G&G Investment Society (GGIS), I'll show you, step-by-step, exactly what to
do.

#1. 12 Monthly issues of investment reports sent to your e-mail, called: G&G
Investment Society (GGIS) portfolio. The second week of each month, I'll
send you my monthly GGIS portfolio. I'll keep you up to date on exactly
what's going on regarding the current and future financial crisis, and I'll
show you some unusual and incredible ways to make money now and as it all
begins to unfold.

#2. Research Report: The 4 Investment Assets You Do NOT Have to Report to
the U.S. Government. Desperate governments do incredibly desperate things,
so you should make sure you own at least one or two of the valuable assets
that you do not have to report to the government. This is completely legal,
and vital to getting rich in the coming currency crisis.

#3. Research Report: Mining Royalties. How to claim your share of the
World's most profitable Gold Mines. Sit back and receive payments from
Royalties as the price of Precious Metals continues to climb as the Fed and
Governments throughout the world continue to print fiat money and not
control their deficit spending.

#4. Research Report: Secrets of the Silver Market. I expect silver to soar
at least 400% to 500% above today's price, over the next few years. This
thorough report shows you the best ways to buy, hold, and store silver. I'll
show you how to get really cheap silver, straight from the U.S. government.
and even a way to store it cheaply in a private Swiss vault, if you're
interested.

#5. Research Report: How to Buy Government Backed Silver for $1.41

#6. Research Report: Urgent Retirement Report. Washington has crippled our
country with debt. And now they're making plans to fill that black hole by
nationalizing your retirement savings! Your 401(k), TSP, your IRA. Maybe
even your money market and bank accounts. They want to grab it all now. And
dish it back to you - a little at a time - when you retire. Revealed inside
this report. The most insidious plot the government has ever hatched - to
nationalize your retirement and STEAL YOUR WEALTH outright.

#7. The G&G e-Newsletter. Also, twice a week, I'll send you the G&G
e-Newsletter giving you my weekly email that details what I think are the
most important financial events of the moment.

#8. Subscribers-only access. You'll also get subscribers-only access to my
investment research archives. Right now, there are several other investments
I recommend you consider buying immediately.

I hope you agree that's fair. And I hope you take advantage of these
opportunities right away. You will put yourselves among a very small group
of Americans who actually come out ahead after this currency crisis unfolds.

To become a member of the G&G Investment Society newsletter subscription,
send an e-mail to GGIS@gngassoc.com and/or visit our website at
www.gngassociates.net and click on the "Products & Services" link and we'll
get you signed up right away.

DON'T WAIT ANOTHER DAY!
- 1 year subscription - $99
- 2 year subscription - $189
- Lifetime subscription - $399

** If you sign up for a 2 year of Lifetime subscription, you'll get a "FREE"
one hour Tax & Financial consultation (a $200 value).

If you need a one-on-one consultation to evaluate your financial situation,
contact me to setup an appointment and get 2011 started off on a good note.

Until the next time,

Ankh Uja Snb (Life, Health, Strength),

Asar Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax
www.gngassociates.net

G&G Associates & G&G Travel are on Facebook, join our fan page.

"Any fool can make something complex, but it takes a genius to make
something simple"
Woodie Guthries

P.S. If you're not a GGIS Paid Subscriber reader yet, it's not a bad way to
start the year. Currently, our GGIS portfolio is packed with great plays to
kick-start your portfolio for 2011.

P.S #2 If you are looking to Travel and looking for steep discounted travel,
visit www.gngassociates.net, click on the "G&G Travel" link and let your
travel planning begin. Let us know where you want to go and we'll do our
best to find you the best deal your money can buy. Become a Fan of G&G
Travel on facebook.

LEGAL NOTICE: This work is based on SEC filings, current events, interviews,
corporate press releases and what I've learned as a financial consultant.
Nothing herein should be considered personalized investment advice. It may
contain errors and you shouldn't make any investment decision based solely
on what you read here. It's your money and your responsibility.

Change Subscription:
http://sub.ezinedirector.net/?fa=m&s=60358553&c=964982552

Cancel Subscription:
http://sub.ezinedirector.net/?fa=r&id=60358553&c=964982552

The Final Piece of the Puzzle

This is
G&G Associates Tax & Financial Consulting
e-Newsletter

The Final Piece of the Puzzle
By Jeff Clark

Hotep G&G Readers,

Everything is in place now.

For the past couple months, I've been harping about the potential for a bearish move in the market. Sentiment indicators, summation indexes, bullish percent indexes… all the technical indicators are warning of a swift and severe correction. The market doesn't care. It just keeps marching higher.

The high-frequency trading desks, the algorithmic computer programs, and the Bernanke printing press have overpowered the technical indicators and – like Atlas propping the world up on his shoulders – kept a persistent bullish bid beneath the market. The new high list keeps growing. Expensive stocks keep getting more expensive.

-----------------------------------
Internal Sponsorship

Black Awareness Month Special: Sign up for a GGIS Lifetime Subscription and you'll get a 50% discount "FOR LIFE" on getting your Taxes Prepared through G&G Associates.
With the falling dollar and the explosion in gold, silver, oil and other natural resource prices, you need to stay on top of your game and manage your "OWN Finances."

Become a GGIS subscriber now and you'll be sure that we make sure you stay on top of your Tax and Financial Future to make sure your BUSINESS … AT HOME is protected. Remember…most people look after their bosses business, but fail to look after their own business at home.

To become a member of the G&G Investment Society newsletter subscription, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the "Products & Services" link and we'll get you signed up right away.

DON'T WAIT ANOTHER DAY!

- 1 year subscription - $99
- 2 year subscription - $189
- Lifetime subscription - $399

** If you sign up for a 2 year or Lifetime subscription, you'll also get a free one hour Tax & Financial consultation (a $200 value).

If you need a one-on-one consultation to evaluate your financial situation, contact me to setup an appointment and get 2011 started off on a good note.

-------------------------------

Every day I warn investors of the potential risks in the market. And every day I start the morning by washing the egg off my face. Why worry about risks when there are such large gains to be made? "It's a new world," the market says. "Either get on board or get out of my way."

So yesterday I sat at my desk, banging my forehead on my keyboard and wondering what else has to happen before the market corrects. What other indicator has to reach a ridiculously extreme level and warn of the impending doom before stocks finally take a breather? This was 9:41 in the morning, Pacific Standard Time (PST).

At 9:42, the phone rang and the final piece of the puzzle fell into place.

"Hi Jeff," the voice said, "It's your mom. Just wanted to get your opinion on the stock market. We're sitting in cash right now, earning 0%. And we're thinking about buying some stocks."

Get out of the market while you can, folks. The "Mother Indicator" has just issued a sell signal.

Mom is the perfect example of a public investor. She doesn't pay much attention to the financial markets. So if she's aware of a trend, or has an inkling to put money somewhere, you can bet the idea has gone mainstream. And she has a near-perfect track record as a contrarian indicator.

Signals from the Mother Indicator don't occur often – perhaps just once every two or three years. They are, however, remarkably accurate… And they always seem to occur within days of important turning points. For example, I first acted on this signal in early February 1994. Stocks had been on a terrific run – up 20% in about eight months. The Fed was easing, so interest rates on CDs and money market funds had been falling. Mom was looking to get a bit more bang for her buck. And for the first time since August 1987, she wanted to buy stocks.

I got the call on the first Saturday in February, and sold everything the next Monday morning. That was the exact high for the stock market in 1994. The S&P 500 lost 17% over the next two months.

Mom has been useful in calling tops and bottoms in the gold and oil markets, as well. In fact, some of the best trades over the years have been based on using Mom as a contrary indicator. I've written about the Mother Indicator before. I've given speeches on the topic. It's one of the most reliable market timing indicators in my arsenal.

At 9:42 PST yesterday morning, the Mother Indicator flashed a sell signal. The S&P 500 was just above 1,322 at the time. I'll bet it's significantly lower two months from now.

If you haven't seen the video "The Day the Dollar Died," do so ASAP:
http://www.youtube.com/watch?v=2N8gJSMoOJc&feature=watch_response

Thanks for reading,

Ankh Uja Snb (Life, Health, Strength),

Asar Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax
www.gngassociates.net

G&G Associates & G&G Travel are on Facebook, join our fan page.
"Any fool can make something complex, but it takes a genius to make something simple"
Woodie Guthries

P.S. If you're not a GGIS Paid Subscriber reader yet, it's not a bad way to start the year. Currently, our GGIS portfolio is packed with great plays to kick-start your portfolio for 2011.

P.S #2 If you are looking to Travel and looking for steep discounted travel, visit www.gngassociates.net, click on the "G&G Travel" link and let your travel planning begin. Let us know where you want to go and we'll do our best to find you the best deal your money can buy. Become a Fan of G&G Travel on facebook.

LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.

Change Subscription:
http://sub.ezinedirector.net/?fa=m&s=123321332&c=964980601

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G&G QUOTES OF THE WEEK

This is
G&G Associates Tax & Financial Consulting
e-Newsletter

QUOTES OF THE WEEK

Karibu (Welcome) G&G Readers,

QUOTES OF THE WEEK:

From Richard Russell, editor of Dow Theory Letters, in remarks posted on his website on January 31st:

''What is it about gold that makes some men lust for it, while others scorn the king of metals and warn us about it? I've thought long and hard about gold and the fierce emotional response that it seems to elicit.

I think that in its essence, rising gold implies that there's something wrong in the nation and in the economy. In most people's minds, rising gold is seen as a danger signal. Rising gold is 'unsettling' to most people. They don't understand why gold is rising, and they wonder whether they should be buying gold or listening to the Fed and scorning it.

Furthermore, the media goes a long way toward muddying the waters. Most articles that appear in magazines or newspapers are written by amateur reporters who know nothing about gold, and who have just interviewed some so-called expert on the yellow metal.''

''The media has kept the US public out of, or afraid of, gold for years, thus holding back what otherwise might have been a panic by Americans to buy gold. In this way, the media has kept gold cheap, cheap enough so that the so-called gold bugs have been able to accumulate the yellow metal at bargain prices over the years.

It's amazing how sentiment can change over the years. One hundred and sixty-two years ago, Americans packed their bags, said 'good bye' to their wives, and headed West to California in the hope of finding gold. Nobody in the mid-1800s doubted the value of gold -- they just knew that they wanted it.

The media today never asks why no fiat currency has lasted for long. In 1971 Nixon slammed down the gold window because the government feared that it was losing too much gold. Yet articles continue to appear in the US media, all suggesting that gold is a hyped-up relic of the past, and that even if you like gold, it is far too expensive at its current price.''

''Ironically, the media seldom attacks the dollar or fiat currencies. The media never mentions that fact that most fiat currencies have died within 40 years of their original creation.

Yes, it's a strange, strange world we live in. And I expect the year 2011 will be a year when a great many questions will be answered. Stock market, the dollar, gold, interest rates -- we await your verdicts.

In the meantime, I believe the surest bet is as follows -- the US dollar will continue to lose purchasing power. All else will stem from that phenomenon.''

. . . and from Thomas G. Donlan, in an editorial in Barron's magazine on January 31st:

'' 'We need to out-innovate, out-educate, and out-build the rest of the world,' [President] Obama said [in his State of the Union address last week]. 'We have to make America the best place on Earth to do business.'

It's a worthy goal, but one that requires turning the clock back many years. America became the best place in the world to do business because America was out-innovating, out-educating and out-building the rest of the world for more than a century.

Because of investments made by so-called robber barons -- not only in their businesses but in great universities -- America has the biggest economy, the largest manufacturing output among the big economies, the most highly developed finance and service sectors and an entrepreneurial culture that attracts talented people and people hungry for wealth from all over the world.

What the president should have said is that we have been living too much on our income from past investments, which were mostly private investments made for profit without much restraint by government. If we are failing to reinvest and rebuild, it is because we are trying to have Uncle Sam do too much. If the U.S. is neglecting its infrastructure, a chief cause is political mismanagement.

America built its railroads primarily with private capital, for the benefit of lenders and shareholders seeking a profit. If we could say the same about highways and high-speed rail, our future would be more secure.''

-----------------------------------
Internal Sponsorship

Black Awareness Month Special: Sign up for a GGIS Lifetime Subscription and you'll get a 50% discount "FOR LIFE" on getting your Taxes Prepared through G&G Associates.

Become a GGIS subscriber now and you'll be sure that we make sure you stay on top of your Tax and Financial Future to make sure your BUSINESS … AT HOME is protected. Remember…most people look after their bosses business, but fail to look after their own business at home.

To become a member of the G&G Investment Society newsletter subscription, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the "Products & Services" link and we'll get you signed up right away.

DON'T WAIT ANOTHER DAY!
- 1 year subscription - $99
- 2 year subscription - $189
- Lifetime subscription - $399

** If you sign up for a 2 year or Lifetime subscription, you'll also get a free one hour Tax & Financial consultation (a $200 value).

If you need a one-on-one consultation to evaluate your financial situation, contact me to setup an appointment and get 2011 started off on a good note.

Until the next time,

Ankh Uja Snb (Life, Health, Strength),

Asar Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax
www.gngassociates.net

G&G Associates & G&G Travel are on Facebook, join our fan page.

"Any fool can make something complex, but it takes a genius to make something simple"
Woodie Guthries

P.S. If you're not a GGIS Paid Subscriber reader yet, it's not a bad way to start the year. Currently, our GGIS portfolio is packed with great plays to kick-start your portfolio for 2011.

P.S #2 If you are looking to Travel and looking for steep discounted travel, visit www.gngassociates.net, click on the "G&G Travel" link and let your travel planning begin. Let us know where you want to go and we'll do our best to find you the best deal your money can buy. Become a Fan of G&G Travel on facebook.

LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.

Change Subscription:
http://sub.ezinedirector.net/?fa=m&s=123321332&c=964980071

Cancel Subscription:
http://sub.ezinedirector.net/?fa=r&id=123321332&c=964980071

GGIS Black Awareness Month Special

This is
G&G Associates Tax & Financial Consulting
e-Newsletter

G&G's Investment Society (GGIS) Subscription

I believe most Americans are in for a huge shock in the next few years. Most will lose a lot of money. The good news is that it is fairly easy and inexpensive to protect yourself, and even make quite a bit on your savings as these events unfold.

Black Awareness Month Special: Sign up for a Lifetime Subscription and you'll get a 50% discount "FOR LIFE" on getting your Taxes Prepared through G&G Associates.

When you take a no-risk, trial subscription to my flagship service, called G&G Investment Society (GGIS), I'll show you, step-by-step, exactly what to do.

A one-year subscription costs $99. Your subscription includes:

#1. 12 Monthly issues of investment reports sent to your e-mail, called: G&G Investment Society (GGIS) portfolio. The second week of each month, I'll send you my monthly GGIS portfolio. I'll keep you up to date on exactly what's going on regarding the current and future financial crisis, and I'll show you some unusual and incredible ways to make money now and as it all begins to unfold.

#2. Research Report: The 4 Investment Assets You Do NOT Have to Report to the U.S. Government. Desperate governments do incredibly desperate things, so you should make sure you own at least one or two of the valuable assets that you do not have to report to the government. This is completely legal, and vital to getting rich in the coming currency crisis.

#3. Research Report: Mining Royalties. How to claim your share of the World's most profitable Gold Mines. Sit back and receive payments from Royalties as the price of Precious Metals continues to climb as the Fed and Governments throughout the world continue to print fiat money and not control their deficit spending.

#4. Research Report: Secrets of the Silver Market. I expect silver to soar at least 400% to 500% above today's price, over the next few years. This thorough report shows you the best ways to buy, hold, and store silver. I'll show you how to get really cheap silver, straight from the U.S. government… and even a way to store it cheaply in a private Swiss vault, if you're interested.

#5. Research Report: How to Buy Government Backed Silver for $1.41

#6. Research Report: Urgent Retirement Report. Washington has crippled our country with debt. And now they're making plans to fill that black hole by nationalizing your retirement savings! Your 401(k), TSP, your IRA. Maybe even your money market and bank accounts. They want to grab it all now. And dish it back to you – a little at a time – when you retire. Revealed inside this report… The most insidious plot the government has ever hatched – to nationalize your retirement and STEAL YOUR WEALTH outright.

#7. The G&G e-Newsletter. Also, twice a week, I'll send you the G&G e-Newsletter giving you my weekly email that details what I think are the most important financial events of the moment.

#8. Subscribers-only access. You'll also get subscribers-only access to my investment research archives. Right now, there are several other investments I recommend you consider buying immediately.

I hope you agree that's fair. And I hope you take advantage of these opportunities right away. You will put yourselves among a very small group of Americans who actually come out ahead after this currency crisis unfolds.

To become a member of the G&G Investment Society newsletter subscription, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the "Products & Services" link and we'll get you signed up right away.

DON'T WAIT ANOTHER DAY!

- 1 year subscription - $99
- 2 year subscription - $189
- Lifetime subscription - $399

If you need a one-on-one consultation, feel free to contact me to setup an appointment.

Until the next time,

Ankh Uja Snb (Life, Health, Strength),

Asar Gary Gray

Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax
www.gngassociates.net

G&G Associates & G&G Travel are on Facebook, join our fan page.

"Any fool can make something complex, but it takes a genius to make something simple"
Woodie Guthries

P.S. If you're not a GGIS Paid Subscriber reader yet, it's not a bad way to start the year. Currently, our GGIS portfolio is packed with great plays to kick-start your portfolio for 2011.

P.S #2 If you are looking to Travel and looking for steep discounted travel, visit www.gngassociates.net, click on the "G&G Travel" link and let your travel planning begin. Let us know where you want to go and we'll do our best to find you the best deal your money can buy. Become a Fan of G&G Travel on facebook.

LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.

Change Subscription:
http://sub.ezinedirector.net/?fa=m&s=123321332&c=964979285

Cancel Subscription:
http://sub.ezinedirector.net/?fa=r&id=123321332&c=964979285

Annuities 101

This is
G&G Associates Tax & Financial Consulting
e-Newsletter

Annuities 101

Karibu (Welcome) G&G Readers,

Since it seems that the majority of financial consultations I've been having lately have involved individuals getting ready to or are looking for an opportunity to retire in the next couple of years. The conversation always arises about the thought of annuities in their investment plan.

So, I thought it would be a good time now to give people a run down on just what an annuity is and the different types that are presented to the masses. This is not an attempt to sell you on the idea of an annuity, just to educate you on them so that you can hopefully make the right decision if ever asked to invest in one.

** Remember…"Liars can figure but figures don't lie, the key is can you figure out if he or she is lying or not."

Annuities have long been considered an investment that insurance salesmen push on unsophisticated clients, not something that smart investors seek out. While annuities may offer tax-deferred earnings and, often, a relatively secure stream of retirement income, many of them also tend to feature steep fees and commissions, inflexible distribution rules and impenetrable complexity.

Example: many investors who purchased "variable" annuities in the 1990s thought they were obtaining an ultra safe investment…until they endured steep losses from 2000 through 2003, when the stock market plunged.

Yet some annuities can have a place in a wise investor's portfolio. They can serve as a welcome safe haven in a time of stock market and real estate volatility. They can reduce the odds of outliving retirement savings in a time of shrunken nest eggs. They can offer an opportunity to defer taxes. And in recent years, several of the more reliable insurance companies have made a few changes that tackle some of the drawbacks.

Instead of simply relying on the advice of a commissioned insurance or investment professional, start by reviewing the various types of annuities listed below. If any seem like they might help you reach your financial goals, shop for the best terms using buying strategies provided here or hire a fee-only financial planner to help.

Annuities often are discussed as if they were a single type of investment. In fact, there are several different types of annuities, each appropriate for different investors and investment goals.

VARIABLE ANNUITIES

WHAT THEY ARE: Variable annuities essentially are a way to invest in mutual funds except that the funds' earnings are tax-deferred and withdrawals can be scheduled as monthly payments that are guaranteed to continue for as long as you (or your spouse…or someone else designated) live. Many of the variable annuities sold these days also feature a component that limits potential capital losses. This feature is an attempt by insurance companies to attract investors who were scared off by the losses suffered in variable annuities a decade ago. Unlike some annuities, variable annuities do not offer a guarantee about the amount that you will receive during retirement when you purchase the product. The size of the distributions depends largely on the performance of the mutual funds you select within your annuity.

Problem: High fees. The typical variable annuity charges annual fees in the neighborhood of 2%, and some charge 3% to 4%. Onetime commissions of 5% or more are common, too, as are surrender fees of 5% to 6% or more if you attempt to withdraw money in the years immediately after investing. Also, investment gains within the variable annuity are taxed as income when the money is withdrawn, not as capital gains, and withdrawals made prior to age 59 ½ are subject to 10% penalty.

Appropriate for: High-tax bracket investors younger than 55 who maxed out 401(k) s and IRAs for the year, who wish to do even more tax-deferred investing and who will not need this money for a t least 15 to 20 years. It takes decades of tax-deferred growth for the advantages of variable annuities to outweigh their additional fees.

Buying Strategy: If you do purchase a variable annuity, do so through a large, low-fee mutual fund company or discount broker, such as Fidelity Investments, Charles Schwab or Vanguard. These tend to charge lowered fees and commissions than do commissioned agents. Select aggressive investments within the variable annuity, and do not withdraw this money for at least a decade, preferably two decades or longer.

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IMMEDIATYE ANNUITIES

WHAT THEY ARE: Immediate annuities operate much like traditional pensions. In exchange for a lump-sum payment, you will receive a fixed amount each month, quarter or year for the rest of your life…or the rest of your spouse's life…or for some predetermined number of years, depending on the distribution option you select.

Problem: Low returns. The fixed payment you receive from an immediate annuity was purchased – and interest rates are extremely low right now. A 60-year-old man who puts $50,000 into an immediate annuity, for instance, currently could receive a monthly income of just $280 for the rest of his life.
Immediate annuities also are likely to reduce the size of the estate you leave to your heirs, particularly if you die relatively young. Some immediate annuities do make payments to heirs when the annuity purchaser dies within a predetermined time frame, but adding such a provision further reduces the size of the distributions that the annuity owner receives during his/her life.

Appropriate for: Retirees who want an ultra stable source of income with no market risk and/or retirees who fear that they might outlive their savings, perhaps because they come from families whose members tend to live long.

Buying strategy: If the security of an immediate annuity appeals to you, wait to buy. Interest rates are likely to rise in the coming years, increasing the distributions offered by immediate annuities. The distributions you receive also will increase the older you are when you purchase your annuity.

If you don't want to wait, at least "ladder" your way into presumably rising rates, putting only 20% of the total amount you intend to invest into an immediate annuity this year, then adding an additional 20% in each of the coming four years. One place to obtain annuity quotes is www.ImmediateAnnuities.com.

Alternative: Longevity annuities, a relatively new product that has become available in recent years, are similar to immediate annuities. Rather than make payments immediately upon the purchase of the annuity, however, longevity annuities do so only when the annuity buyer reaches some advanced age--- often 75, 80 or 85. Buyers who die before this age receive nothing, but those who live long enough receive much, much more per month than from an immediate annuity. A longevity annuity is a viable option if you fear that you will outlive your money but your financial situation seems secure for the first 15 or 20 years or retirement.

Example: A 65-year-old woman currently would receive a monthly income of around $140 from a $25,000 investment in an immediate annuity—but she could receive $1,169 starting at age 85 from a longevity annuity.

EQUITY-INDEXED ANNUITIES

WHAT THEY ARE: Equity-indexed annuities (EIAs) are deferred annuities, so their distributions do not begin immediately but rather at some predetermined future date. The size distribution is determined in part by the performance of an underlying stock market index—often the Standard & Poor's 500 stock index of the Russell 2000 Index. But unlike index funds, EIAs come with safeguards against losses—there's usually a guarantee that the principal won't decline much or at all in value, plus a guarantee minimum annual return of 2% to 3%, so your investment could make money even in years when the underlying index falls. There's often a death benefit, too --- a designated heir receives a check if the annuity owner dies before receiving some predetermined amount.

Problem: Complexity. Insurance companies that offer EIAs use extremely complicated formulas to calculate these annuities' returns. That makes it very difficult for investors to compare EIAs or to predict how much they can expect to earn from one. Investors should not expect to receive the full returns of the underlying index—EIA returns generally are capped at the 6% per year. On top of this, steep EIA annual fees, surrender fees and commissions eat in profits.

Appropriate for: Conservative investors who seek stock gains but who do not want to risk losses.

Buying strategy: Ask the financial pros you speak with for data on the past 10 years of annual returns on the EIAs that they recommend. Compare those past returns to get some idea as to which EIAs truly offer the best returns and/or lowest risks. Also, compare commissions and annual fees.

CHECK RATINGS

Don't buy annuities issued by an insurer rated lower than A by A.M. Best (www.AMBest.com) or Moody's (www.Moodys.com). A low-rated insurer is more likely to fail.

Now…if you want to see what I really think about the rating agencies, see my newsletter archive and view the Dec 27, 2010 issue "By Far the Most Important Development of 2010"
Click below for archive:
http://ezinedirector.com/admin/publisher/archive/public/?fuseaction=a&e=7944575E0843077440

Until the next time,

Ankh Uja Snb (Life, Health, Strength),

Asar Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax
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LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.

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