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With the rate of volatility in the stock market today, lots of investors are beginning to show concerns over this rather disturbing development. Many of them are wondering whether it is still safe for them to invest their hard earned money in the exchange market. A majority of those saving for retirement see the stock market as the only option in terms of where they can safely invest their money to make high and profitable returns, but because of the recent development, they really want to know if it is still a safe option.
Even though there has been indications showing that the stock market is not the most reliable place to invest for short term, there are still a lot of ways that are safe and through which one can make investments in the market.
One of the safe media through which investors can invest in the stock market is through the variable and index annuities. These contain traditional fixed annuities which guarantee regular income and a subaccount that enables investment into the stock market via an index. There are several advantages to using this medium. One of it is that the money generated from the stock market can be invested back into the annuities, thereby increasing the amount of interest earning capital available to the investor. Also, this medium of investing in the stock market is usually tax-deferred.
Another safe way to invest in the stock market is via indexed mutual funds or the exchange traded funds. The S & P 500 are the types of indexes of stocks that can be invested in this kind of medium. The advantage here is mostly in a long term investment. When you invest through this medium in long term, there is the high possibility of making constant returns.
There are also the deferred variable annuities. This medium permits those saving for retirement to use both the stock market as well as an account that generates interest. The good thing about this medium is that the investor is sure of getting full protection, and also has a better way of making investment in the stock market. This is because the annuity is usually insured and guaranteed by state governments. And not only that; all the investments made through this medium are also tax-deferred.
According to statistics, because of the high volatile nature of the stock market, it is not advisable for those investing for retirement to engage in short term investment. It is wiser and more profitable to consider a long term investment if you are an investor that is interested in saving for your retirement by investing in the stock market.
