another way to create your own annuity
I've read the thread on annuities with some interest, and would like to offer an alternate idea. Suggest you take a look at the 17 billion $ mkt cap Loomis Sayles all weather bond fund. Make sure to evaluate their holdings, currently averaging A quality. You can go back all the way to 1996 (note, they did change from quarterly to monthly some time ago) and see their payouts have been approximately the same. They've also paid many special EOY distributions. So far in '08 their monthly payouts per share have been .0569, .0714, .0857, .0786 and May's .0823. Currently their forward yield is 7% (I never count in the special EOY's). Dan Fuss (IMO) is absolutely the best bond picker in the country and their long term chart indicates I may be correct. I spoke with Loomis Sayles yesterday (Friday) and was told rather bluntly that Dan Fuss is not going to retire anytime soon, he told his associates he's die at his desk. Why pay commissions when this way, you can leave the capital to your estate or whomever you put in your will. If you can afford to take out only 6% monthly you can reinvest the extra 1% to take care of inflation. Just a thought! Ron *some day I'll get either completely fed up with watching the market & just put close to all of our NAV in that fund with some other in the higher yielding Atlantic Power (ATP.UN, ATPWF-this is not a trust), and maybe a bit of some other stuff to goose up the yield a bit more. That is what my wife has been instructed to do (in writing) if I get struck by lightning on the golf course or whatever because she has ZERO interest in the market.
just a quick addendum to prior post on my idea of annuities. (1) ATPWF has been a core holding for us for a long time in all accounts & no plans to change it (their last quarterly report was strong). (2) LSBDX requires a min investment of 100K, they also have the little sister fund LSBRX (same exact holdings, just a tad less in yield), (3) the comment was made to me by Loomis Sayles re. LSBDX that they view the current environment similar to what we experienced in the 2000, 2001 time frame and they've been buying holdings that they think are dirt cheap & will do well during the inevitable recovery. In other words, the NAV “may” continue to linger (or it could take off at a moment's notice-no one really knows).