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Author: dek2000 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75625  
Subject: Total Return accounts Date: 12/20/1999 11:09 PM
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Is anyone familiar with the type of accounts that invest in different bond-types, give you the investements rate of return minus 3%, AND guarantee that your annual rate of return over time will never be less that an annualized rate of 3%?
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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 16700 of 75625
Subject: Re: Total Return accounts Date: 12/21/1999 9:54 AM
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I am not familiar with the investment you describe, but the returns stated sound terrible.

First, Fools believe that an S&P Index Mutual fund is a reasonably reliable, conservative investment. The average return is 12%. Corrections and down turns in the market do occur, but Fools believe they will be short--probably less than 3 years.

If you are uncomfortable with stocks, then laddered maturity, investment grade corporate bond portfolios can be constructed that will yield 8% these days. You can read more about them over on the Bond and Fixed Income board. Enter the word bond in the board box below and press find.

3% after taxes probably will not cover inflation. Most of us need better returns than that. CD's sound better. Even Savings Bonds sound better.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 16702 of 75625
Subject: Re: Total Return accounts Date: 12/21/1999 9:56 AM
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Greetings, Dek2000, and welcome. You wrote:

<<Is anyone familiar with the type of accounts that invest in different bond-types, give you the investements rate of return minus 3%, AND guarantee that your annual rate of return over time will never be less that an annualized rate of 3%? >>

Not the way you describe it, no. But it sounds suspiciously similar to an equity-indexed annuity. You will find a description of that at http://www.fool.com/retirement/annuities/annuities01.htm.

Regards..Pixy

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