Low liquidity, low return, high security: Fixed annuities thrive in recession

Anyone looking to document the effect of investor fear in the age of the "Great Recession" need look no further than the recent explosion in fixed annuities. Reflecting growth in other fear-based investments like gold and treasury bonds, sales of the secure, conservative annuities jumped by 74% in the first three months of 2009.

Fixed annuities are a contract with an insurance company, wherein a customer gives the company a lump sum and receives a set interest rate for a period of time. Generally, participants have to keep their money in the annuity for seven to ten years, or have to pay a surrender fee when they withdraw it. Some annuities allow users to withdraw a certain amount for free each year.

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Low liquidity, low return, high security: Fixed annuities thrive in recession originally appeared on BloggingStocks on Mon, 20 Jul 2009 13:00:00 EST. Please see our terms for use of feeds.

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