“I have a friend,” writes an e-mail correspondent, “who was a stockbroker (prior to that he was a lawyer). He later made his fortune as his own full-time trader of options, and now is the CEO of a software company. So he’s no idiot. He recently said, ‘I set up little stock portfolios for my children. After I bought the stocks for their portfolios, I just let them be, and didn’t touch them. For my own portfolio, I actively bought and sold stocks, and watched the market closely. AND I’M AMAZED TO SEE HOW MUCH BETTER MY KIDS’ PORTFOLIOS HAVE DONE THAN MY OWN.’ More evidence that the buy and hold strategy seems to be a good one.”

A.T.: Yep.


An amazingly expensive way to translate what would have been lightly taxed long-term capital gains into more heavily taxed ordinary income at withdrawal. And yet they still sell like hotcakes — including a not inconsiderable number that get bought for … hold on to your hat … IRAs, which are already tax-deferred. As reported last year in The Wall Street Journal, “17% of the $627 billion in variable annuities are in Individual Retirement Accounts.” The only thing dumber would be buying low-interest, tax-free municipal bonds for an already-tax-sheltered IRA.


Q. “Do you know the difference between an introverted actuary and an extroverted actuary?”

A. “The extroverted actuary looks down at your shoes when he’s talking to you.”

OK, that was a cheap joke. And not true, either.

Tomorrow: free long distance (in case you’re the last to hear), and an apology for passing junk e-mail on to you.

HOUSEKEEPING NOTE: Currently, an alternative route to this column is As of February 1, that will be the ONLY way to reach it. To keep reading, please adjust your bookmark. Also, please note my new e-address:



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