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The importance of diversity in a portfolio

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When choosing investments with guaranteed long term payouts in mind, it's important to have a good idea of when one will need the assets, and how high of a risk the investments can assume. According to the Calgary Herald, some financial advisers suggest that investors analyze several different types of annuities and other financial products, keeping in mind specific financial requirements.

Having some variety in a financial portfolio is always a good practice. Consider that while products like long-term fixed income investments offer high interest rates, a volatile market may risk lower payouts in the future. Immediate annuities can provide funds and interest if an investor needs to see immediate gains, and stocks or mutual funds can provide high level gains down the line, but are really best for investors who don't need to see immediate results.

Investing in stocks that pay dividends allows investors to stay ahead of inflation costs, according to the source.

In all, many professional financial advisers say that investors should value variety in their portfolios in order to properly prepare for any unforeseen changes in financial need or stock market volatility.

According to the Insurance Information Institute, although annuities sales have improved in recent months with the integration of new, specific annuities products, overall sales of annuities are in relative decline, and fell 27 percent between 2009 and 2010. 

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