Mix and Match

There are many benefits of using asset allocation1 with variable annuities. They include, but are not limited to, tax-free switching between variable accounts, tax-deferred growth, guaranteed death benefit, automatic asset rebalancing, and systematic withdrawals.

Without a doubt, most people are shocked to learn that where they decide to invest their money will determine approximately 92% of their return, according to Ibbotson Associates. In other words, the decision when to invest is not as important as the types of investment classes in which to invest-such as cash, bonds, and stocks. The asset classes in which you choose to invest will have more impact on the overall portfolio return.

Know Your Choices
The three main investment categories2 to consider when deciding an asset allocation strategy are:

• Stocks-represent ownership in a company. They generally offer the best growth opportunities.
• Bonds-represent a loan to a government or corporation. They generally offer steady, fixed income.
• Cash-represent short-term investments. They offer protection for an investor's money, but with minimal growth.

Why Mix and Match?
Generally speaking, riskier investments offer higher returns. By investing in all three categories, you can combine riskier investments (stocks), with moderate-risk investments (bonds), and low-risk investments (cash).

Stocks, bonds, and cash typically don't react the same way to the current economic environment. When stocks are down, bonds may be up, and vice versa. In addition, other countries may provide ample growth opportunities during periods when the U.S. economy may stumble. Asset allocation can provide a diversified portfolio that provides for strong growth opportunities, as well as security measures. Remember that cash is always a good anchor, but it lacks the ability to keep up with inflation over the long term.

The Long Term
If you have a five- to ten-year time horizon, a diversified portfolio mix will have the best chance to succeed. Over time, you will experience the ripples and waves of nearly every economic cycle-giving each investment category a chance to shine. Even if one category experiences a downturn, chances are another one is performing well.

Ideally, you should only change your investments when your financial goals or circumstances change, not when market conditions appear to be in transition. Adopting a "hands-off" philosophy can help ensure that those investment choices have a chance to succeed. You can spend your time better by not worrying about the implications each fluctuation in the market may have on your long-term money. As long as you are comfortable with the asset choices that you've made, your investments-and your peace of mind-should be satisfied. That's why it is important to speak with a Financial Consultant who can provide the kind of experienced, professional guidance that will help you achieve your goals.

Talk to a Financial Consultant about devising an asset-allocation model with a variable annuity just for you. You will see the ease of investing through a combination of the three primary investment categories. Once you've worked with an investment consultant to make the decision about how much money should go into each category, you've already completed 92% of the job.

¹ Asset allocation/investment timing cannot eliminate the risk of fluctuating prices and uncertain returns.

² Investments in stocks and bonds are subject to risk, including stock market and interest rate fluctuations. Cash instruments generally offer stability and income, but an investment in these securities may not be guaranteed by the U. S. government or any other entity. Investments in non-U.S. securities, are subject to additional risks, including fluctuations, political and social instability, differing securities regulations and accounting standards, and limited public information. Variable annuities and mutual funds are offered by prospectus only.

ENB Associates Inc. is a wholly owned subsidiary of Evans National Bank. Securities are offered by O'Keefe Shaw & Co., Inc. Member NASD, and SIPC. Products purchased through O'Keefe Shaw may lose value, are not deposits with obligations of, or guaranteed by Evans National Bank or affiliates and are not insured by the FDIC.