How to Allocate your Asset in a Crisis

The same type of products, the longer the investment period, the higher of the return, because the longer the term, the greater the risk, this is commonly known as the night long dream more. But the risk here is not necessarily the risk of a loss of principal, like a 10-year Treasury note, a bank saving regularly, and an insurance company annuity insurance. They are also long, but they are safe. The risk here comes from the capital occupancy rate, mainly the issue of opportunity costs, opportunity costs are not the cost of spending, but the benefits. When you choose one thing, you have to give up the benefits of another. This is in fact a choice, short-term investment and financial management will have reinvestment risk, long-term, there will be opportunities for cost considerations, certain debt investment, have a half-way redemption, in this case, there will be interest rate risk. Investment finance needs to be based on individual circumstances, short-term and long-term combination.

Annuity insurance

What is an annuity?

What's s annuities?

it's a stream of equal cash flows that's the time at equal intervals over a period.

This is an equivalent cash flow that occurs at an equal interval over a certain period of time.

Annuity insurance is a life insurance based on the survival of the insured.

The main features are as follows:

1, compulsory savings

2, lock interest rate

3, targeted income

4, cash conversion

Annuity insurance determines the interest rate, income written into the insurance contract, subject to insurance law and contract law, safe and reliable. not affected by the decline in market interest rates. Through the setting of various relationships, the purpose of the targeted income, the ownership of annuity insurance belongs to the insured, and in some cases, can play the purpose of asset isolation. Cash conversion, part of the annuity insurance can be based on the future expectations of the individual to withdraw part of the cash value to ensure their own needs. It is also possible to increase the liquidity of funds through a late policy cash value loan.

Annuity insurance as a compulsory savings deposit insurance, liquidity relative to other banks financial liquidity is poor, suitable for holding the first survival pension payment according to the provisions of the Bank circanising, the first survival payment needs to be effective after 5 years of the policy.

If you don't consider the time value of money, investing in financial management is a hooligan. You can't just focus on digital good-looking, but ignore the value of time, so-called gains are obtained through long-term holdings. In fact, the so-called liquidity is relative, just like securities investment, although liquidity is strong, but if you buy at 5000 points, now the same liquidity is poor, locked up, unless you cut meat.

The liquidity of insurance comes from three main sources.

1, change the policyholder.

2, policy loans.

3, return the cash value.

Annuity insurance can not only pay attention to the rate of return, should consider the payment model, collection mode, exit mechanism, etc. in line with their future expectations of cash flow demand. Booking rate , the actual interest rate, needs to be calculated through the Excel tool IRR, different annuity insurance IRR internal rate of return is different.

Annuity insurance is suitable for long-term investment, the funds are relatively generous, and some funds are set aside for future use.