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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: AXA Equitable Asset Mgt Investment Date: 6/16/2005 12:19 PM
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Again, a VA is not for everyone, but neither is a go-it-alone mutual fund. I see clients every month that tried it on their own and lost much of their life savings. Telling them they saved money with a no-load fund that had little or no 12b-1 fees is of little comfort to them.

I can't tell you how strongly I disagree with you on VA's. I have one, with American Legacy, which has underperformed by almost any measure. I blame the extra 1% fees associated with the annuity. I also have a variety of index funds, but mainly VEXMX and VGSIX which have outperformed. It appears that when you say "Index Fund" you mean an S&P emulator, whuch has underperformed of late. Check back in 20 years and we'll compare notes. I also have a bundle of American Funds, which are front loaded, and they are doing well. The fees are low, and I am satisfied with the performance. One big advantage to me is that they include a substantial non-US investment automatically, so that I don't have to search out good funds and try to maintain a good mix. Having said that, I wouldn't buy them if I were starting out today. The front end load is a big obstacle. But I suppose with more than a million they eliminate the load, so this wouldn't be an issue for many here.

My other Mutual Fund exposure is the Fidelity FLPSX and FCNTX in my 401K. When I retire I may move these out of the 401K (Should I? I would appreciate any advice here. The funds are available at Fidelity, but I believe the Low-Priced Stocks fund is closed to new investors.)

At any rate, when I retire next year, I will draw the annuity down first. It should last three years. Then I'm undecided, but there is no rush. I may take some IRA money out and convert to Roths, as long as the tax bite is not over 15%.

At any rate, the management fees associated with VA's are a huge anchor on performance, and I expect to be needing money for the next 40 years, so a fixed 6% would be dumb in the extreme. imo.

cliff
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