Variable Annuities

MONEY MATTERS to consider over the weekend:LOOKING BACK: "One historical fact to keep in mind: In seven of the past nine presidential elections, a bear market started within 18 months after the inauguration."Some bears -- 1962, 1966, 1987, 1990 -- were delayed 12-18 months, but the two worst bear markets started within two months after the 1968 and 1972 elections." (InvesTech Market Analyst.)WARNING: "The risk in owning government bond funds is not in the bonds' credit rating, but rather what happens to interest rates, or 'market risk.

NEW YORK -- Dutch insurer Aegon NV yesterday reported that its second-quarter profit fell 12 percent after gains from investments in equities, bonds and real estate declined. The company, which has its U.S. headquarters in Baltimore, said its net income dropped to 664 million euros ($855 million), or 34 cents a share, from 751 million euros, or 41 cents a share, for the second quarter of 2005, beating analysts' estimates of 518 million euros. "Competition continues to be tough in all markets," Chief Executive Officer Donald J. Shepard said in a telephone interview.

Aegon NV, a giant European insurance company which has its U.S. headquarters in Baltimore, said yesterday that net income jumped 16.1 percent in the first quarter, powered by higher sales of annuities and other products in the United States.The Dutch company made $367 million, or 327 million euros, in the first quarter that ended March 31, compared with net income of $316 million, or 294 million euros, reported for the first quarter of 1998.Shares of Aegon, which trade on the New York Stock Exchange, closed at $89.875, down $1.6875.

With confidence in the securities markets eroding, the economic outlook cloudy and higher taxes a threat, people like you are looking for safe harbors. What better than an investment that guarantees you a fixed income for life, with the interest build-up tax deferred?That's what many of you concluded in the late 1980s when you made annuities a "hot" new investment. The life insurance industry is betting you'll make annuities an even hotter investment in the 1990s.Highly promoted and widely debated, annuities achieved a sales increase of about 34 percent in 1989.

Don't let the future sneak up on you.With the Dow Jones industrial average so capable of dramatic highs, and with investors worried about sudden declines, now's the time to consider investments likely to play an important role in the long-range future.Such choices aren't for folks with six-month or one-year time horizons, but rather those seeking new extended trends with the intent of hanging on for dear life, braving volatility along the way.If your investment goals extend well into the coming century, think small, think international and think technology.

IF YOU HAVE a complaint against a certified financial planner (CFP), there's a grievance procedure you may not have known about. The CFP Board of Standards in Denver is putting more effort into enforcing its code of ethics.Sanctions for wrongdoers are mild, to say the least. Injured consumers should first complain in writing to their state securities office or to the National Association of Securities Dealers (NASD) in Washington, D.C., if the planner sells mutual funds or variable annuities.

Aegon N.V., the big Dutch insurer that operates its U.S. operations out of Baltimore, said yesterday that its earnings rose more than 9 percent to $226 million in the second quarter ended June 30, compared with the same quarter a year ago.Net income jumped 11.3 percent to $424 million for the first half of the year. The company earned 711.1 million guilders for the same period, up 15.7 percent from the same period in 1995."It is one of those periods where the numbers kind of speak for themselves," said Robert McGraw, Aegon's senior vice president and group treasurer.

Let's fast-forward into your future. You're 67 and healthy. You retired a month ago full of thoughts about all the things you could do now that you have time to do them.You rip into envelopes containing your first Social Security check and the first payment from your 401(k) retirement fund.Whoa! Your spirits drop like a hot-air balloon when the fire goes out. You realize you're going to spend the rest of your life pinching pennies and scrounging to make ends meet.With some planning you can avoid things turning out that way. "Procrastination is the biggest reason people don't meet their goals," said Josephine Turner, extension economist at Auburn University.

Investigators probing allegations of bid-rigging and kickbacks in the insurance industry have requested information from Aegon NV, the Dutch insurance giant whose U.S. operations are based in Baltimore, the top official of the company said. Donald J. Shepard, chairman of the executive board, said yesterday at a news conference that the company had received a subpoena from Connecticut's attorney general, who began an investigation into the insurance industry in the summer. "I don't expect any issues, but when you receive a subpoena you comply," Shepard told Bloomberg News.

Morgan Stanley has fired the branch manager of its Baltimore office and a broker there who are reportedly being investigated by the U.S. Securities and Exchange Commission. Harry "Buddy" Buzzerd, the branch manager, and broker Chris Glassman were let go last month, spokeswoman Andrea Slattery said yesterday. She would not explain why or comment on the alleged inquiry. "We never comment on regulatory matters," she said. The Wall Street Journal, which reported this week that the SEC is investigating mutual fund trading at the Baltimore office, said the pair were dismissed for "activities related to market timing."