Expert: Paul Henneman - 6/6/2007

Question
We're both in our 70's have cash assets over $600K and are looking into developing a better portfolio (right now we have let our 401K's just percolate) we want to be more agressive and look for better returns. We've gone to 2 finiancal advisors and they both pushed annuities yet we've heard Bob Brinker say they are a bad deal

Answer
Thank you Don for your question! Yes, I would agree with Don Brinker. Particularly for your situation. Annuites are in my mind a very conservative investment, and one that does not pay you back well. One of the main reasons that they are so popular is that financial advisors make very good fees when they sell an annuity!  
While this is not always the case, most financial advisors are not worth it. The problem is that their main interest is to find more clients, and sell investments that pay the highest fees to the advisor. With all of this going on, they actually have little time to research what type of investments their clients should be in. There are of course exceptions I am sure, and good financial advisors out there. But they are hard to find, so tread carefully.
You say that you want to be more agressive, it really depends upon how agressive. An index mutual fund may be something you should look into. These are funds that copy exactly a major index such as the S&P500, perhaps the most stable of the major indexes. Your investments would never beat or fall short of that indexes average performance. On average you could expect roughly 11% return on your investment. Some years will be much better, some years you will actually lose money. But over time, the years should average out to roughly that level.  Vanguards index fund with the ticker VFINX is an example of this, it is an index fund based on the S&P500 index.
If you are looking for higher returns than an average 11% per year, probably the only realistic option is a portfolio of stocks. This is a BIG topic on how to do properly. It will take a great deal of time to learn, research, and trade effectively a stock portfolio. If interested, please do not hesitate to follow up with me and I would be happy to point you to some websites and materials to get you started in the learning process.
One general source I recommend to everyone is "Investing for Dummies". I realize it is not a flattering title, but will give you the basic knowledge you will need on most forms of investing to make the decision on what is best for you. Annuities are covered, as are index mutual funds, stocks, even real estate.
I hope that this helps get you started. Please do not hesitate to follow up with me if I can be of any additional service, and best of luck with your investments going forward!

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com