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Bond Portfolios vs. Index Annuities in Rising Interest Rate Environment

Rob Brinkman

Ben Bernanke of the Federal Reserve is clearly pointing to higher interest rates in the future. Probably not a surprise as he would have trouble taking interest rates any lower than they have been for the last few years.

Quantitative easing is coming to an end and now the conservative investor, who has traditionally relied on bonds as a safe money alternative, faces a quandary. How to safely make money in a rising interest rate environment?

This educational video explains (in a very detailed, yet easy to understand way) how a fixed index annuity can be a smart alternative to bond funds given our current rising interest rate environment.

To learn more from this annuity professional, click here (Rob Brinkman).

About the Author:

Rob Brinkman began his investment career in 1987, one month after the infamous October stock market crash.  “In the wake of that kind of financial devastation, one learns the importance of a conservative approach to money management”, Rob was quoted in the local Texas newspaper that next week.

Over the past 26 years Rob has become one of the industry’s most respected advocates for conservative, safe investing.  As an executive for one of the country’s largest investment/insurance firms, Rob designed and implemented annuity platforms for clients such as Merrill Lynch, Raymond James and UBS.  In his private practice, Rob works with individuals who are in or nearing retirement, assisting them in asset preservation and income generation.  His ‘white board’ educational videos have become the internet standard for both basic understanding of investment fundamentals, as well as advanced investment strategies.

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  • Jason Wenk says:

    At the 3 minute mark you say that bond interest rates were coming down in the mid 1980s then they went up. That's quite a bit off. Bond interest rates hit their all-time high in September 1981 (15.2% on a 30 year treasury). By 1985 they had fallen to 11.21% and have continued their free fall ever since. Not a bad article but ya gotta get the facts right;).

  • Rob Brinkman says:

    Jason, when I said mid-80’s, I was referring to 1987. In fact, at the 6:07 mark of the video I actually show the chart that illustrates what happened to investors when the bond market spiked up and then continued its retreat in 1988.
    Rob Brinkman

  • Annuity123 says:

    Jason, thanks very much for leaving a comment. You are correct in saying that the bond interest rate peak was in '81 and that it declined from there. However, the mid-80s upswing statement in the video is referring to a short term upward spike that occurred in 1987. A detailed chart showing the historical bond interest rate movements can be seen at the 6 minute mark.

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