Originally published in 2020. Updated in October 2025 to reflect recent annuity sales trends and product developments.

As life expectancy increases and stock market volatility seems to grow, annuities are gaining in popularity as people seek safety for their money.  According to InvestmentNews, total U.S. annuity sales rose from about $219 billion in 2020 to $434 billion in 2024, and reached $223 billion in the first half of 2025.

We’re seeing structural drivers behind the surge: more capital is flowing into the annuity business via private equity; distributors are building new platforms; and consumers increasingly worry about guaranteed income sources beyond the market or Social Security.

It is essential to share some truths about annuities and explain the risks of these seemingly safe products, which are sold as “can’t miss” solutions. 

One of the terms most often heard in the world of finance is “risk” as in "investment risk." Often, people think of risk as something dangerous and to be avoided. There are many circumstances that determine how people view investment risk.

Below are some interesting ways to think about investment risk. 

As many of you know, I am fascinated as to why people make the choices and decisions they make. Many people who work in our industry are focused on valuation ratios, dividends, profitability ratios, balance sheets and charts. With data becoming so easily and readily available these days, I think the extra “edge” these data points produce is becoming smaller and smaller. I believe one area of investing that remains important and useful is sentiment. Digging a little deeper, one can find some interesting cross-currents between expected returns and investor sentiment.

What exactly is investor sentiment? In the most basic sense, investor sentiment is how investors feel about the overall direction of the markets or a particular stock.

One way in which investor sentiment is measured is through the AAII Sentiment Survey. This is a widely cited survey and AAII stands for the American Association of Individual Investors. This association is made up of roughly 150,000 investors, with the average member being in their mid-60s with a median portfolio over $1M. Every week, the AAII surveys about 300 members asking them if they feel bullish, neutral or bearish about the direction of the stock market for the next 6 months.

When we think about investing in equities here at Carnegie, we think of the companies we invest in as businesses. If I polled 5 random people off the street and asked them to list 5 good companies, depending upon their age, sex and race, I would probably hear names like Apple, Facebook, Google, Tesla and Netflix. While these companies have performed admirably in the last few years, we never lose sight of our pursuit in finding great businesses with sustainable business models or what Warren Buffet likes to call a “moat”. What if I told you that one of the best sectors to invest in over time is a collection of boring, slow growing businesses? 

As a firm with roots in Cleveland, the city is abuzz with excitement surrounding the Cleveland Cavaliers run to the NBA Finals. It is great to experience the excitement that cities like Cincinnati and Philadelphia have  enjoyed in the past and our hope is that this team will end Cleveland’s 51 year title drought. The Cavs will need to play great team basketball to beat the Golden State Warriors but when it comes to investing; sometimes it’s best to separate certain parts of the “team” or businesses. This is often referred to as spin-offs on Wall Street.

Growing up on the bond side of the business wasn’t always easy. There was never any snappy cocktail party conversation about what’s going on in the bond market like I often overheard on stocks…go figure.

With the high level of the stock market and an aging population demographic, my how times have changed. The bond market looks mighty interesting to a lot of folks. As a $38 trillion global bond market (vs. the S & P market cap at $18 trillion), I’m glad to see it’s not being totally ignored, but I am concerned as well. A lot of people these days view bond funds as a placeholder to park cash, like a money market vehicle with return, unaware of the downside risks. Bond funds are especially susceptible to volatility and erosion when rates rise (and, oh by the way, rates will rise at some point). 

Often times on the news, you may hear the names of famous CEOs like Tim Cook, Warren Buffett and Bob Iger. Why are they discussed so often? What separates them from their peers? Besides being at the helm of some of the most well-known and companies in the world, these CEOs, among many others have done a very good job of creating value for shareholders. How did these CEOs do such a wonderful job of creating value?

Over ONE TRILLION DOLLARS is managed by the top ten bond mutual funds, according to Forbes. This vast pool of assets controlled by a few players affects the whole asset class. In our whitepaper, "Bondmageddon: A Whitepaper on the Hidden Risks and Costs of Bond Mutual Funds," we discuss the current landscape of these investments and the risks investors face today. We also outline the five critical strategic considerations we make when constructing a bond portfolio.

It’s tax time--don’t lose sight of your financial planning goals. It’s not too late to make your IRA contribution for 2014.  You can make 2014 IRA contributions until April 15, 2015. Be sure you are taking full advantage of the opportunity to save for retirement.