No. of Recommendations: 0
TinyTone wrote:
<<Do you really think annuities are lousy when compared head to head with a mutual fund within an IRA?

I have a variable annuity through my 403(b) plan which invests in stocks much like a fund. I'd be interested in hearing what you think the disadvantages are compared to a mutual fund in an IRA.>>

There was an interesting article in Monday's Wall Street Journal (their weekly Annuities column) that discussed a Morningstar study comparing returns on variable annuity investments to mutual funds with similar objectives. If I remember correctly, plain old mutual funds came out ahead in something like 6 of 8 categories.

I didn't pay too much attention to the article, but one thing I do remember was a quote from a very Wise person trying to make the case for annuities by saying that, rather than looking at the performance of individual components, one needs to look at the overall performance of portfolios. This is certainly a very Foolish concept, but it seems unlikely that a portfolio of poorly performing investments is likely to magically become a winner.
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