Structured Settlement Annuity Investing

 

While interest rates continue to remain quite low, buyers, primarily retirees, battle to seek out financial products anywhere they can to fund their financial goals. Regrettably, but nevertheless, the necessity of earning a necessary return to fund financial ambitions becomes the mother of invention, contributing to the creative development of the large number of investment techniques, both equally authentic and fraudulent. A modern offering of growing interest is structured settlement annuity investing, usually offering “no risk” charges of return within the 4% to 7% range. Generally, the opportunity for “high yield” (not less than relative to modern interest rates) and “no risk” is really a red flag warning, waiving in the wind. However the fact of the matter is, with structured settlement annuity investing, the higher returns legitimately offer a reduced level of risk. The attractive return relative to other low-risk cash flow investments is not as a result of increased risk, but as a substitute because of very poor liquidity. Which means this sort of financial commitment choices can likely be considered a strategy to deliver bigger returns, not by a high level of risk, but a liquidity premium. Nevertheless the concern is always that the investments are so illiquid plus the hard cash flows are so irregular, they in all probability need to only ever be thought of for a incredibly small percentage of the client’s portfolio in any case.

Clients are now being encouraged to invest in structured settlement annuities, but are understandably cautious of the offering of high returns with relatively low risk given. In conclusion, most offers of high returns that seems too good to be true for the risk that is involved, may in fact not be legitimate. However as a consequence of the exclusive way that structured settlement annuities work, the fact is higher yields will not actually lead to a high risk premium, but a low level of risk with a small liquidity premium.