Fixed Annuity
An annuity paying a guaranteed rate from the insurer's general account.
What is Fixed Annuity?
The insurer guarantees principal and a minimum rate, so the insurer bears the investment risk. Not a security - regulated as insurance. The main risk for the owner is purchasing power: fixed payments lose value to inflation.
Fixed Annuity: a worked example
A 5-year fixed annuity guaranteeing 4.5%, with surrender charges for early withdrawal.
More terms in Equities, Funds & Alternatives
Shareholder Rights (Statutory vs. Cumulative Voting)
Voting, preemptive rights, dividends when declared, inspection, limited liability.
Types of Preferred Stock
Cumulative, convertible, callable, participating, and floating-rate preferred.
American Depositary Receipt (ADR)
A dollar-denominated receipt for foreign shares, traded in the US.
Rights vs. Warrants
Rights: short-term, below market. Warrants: long-term, above market.
Restricted & Control Stock (Rule 144)
Unregistered or insider-held stock with resale limits.
Employee Stock Options (ISO vs. NSO)
Incentive options get capital gains treatment; nonqualified options create income at exercise.
Technical Analysis
Forecasting prices from charts, trends, and trading volume.
Fundamental Analysis
Valuing a company from its financial statements, management, and industry.