April 22, 2004
I have an IRA with a variable annuity. The value of my IRA in March 2000 was above 60000 dollars. I was a good longterm shareholder at that time in mutual funds. The value of my IRA in late 2003 was less than 30000 dollars. I decided to move my IRA dollars to a variable annuity where I could actively manage it. The terms of the contract allowed me unlimited daily exchanges. Now, in response to your concern about how I manage my money, I have been told that I must hold for a 2 week minimum. I had money in cash at the beginning of this quarter. Because of my concern about the events in Iraq and the potential for the employment report to change the market direction I waited to invest this money until April 5th. I invested it in 2 funds holding US funds, one a midcap and one a tech fund. I was anticipating a strong earnings season. However, once I invested the money and was locked in for two weeks, interest rates became the prime concern of the market and has resulted in a loss to me of approx -3.87 percent since I initiated this investment. I also have a 401k where I am still allowed to do exchanges on US mutual funds, which I sold on 4/6, as I felt that the raise in interest rates was bad for my investments. Do you know how hard it is for me to make up the loss of -3.87 percent? I feel that I should have the ability to make my investment decisions when I want. I should be able to determine how much risk I want to take. That is what I negotiated for when I purchased the variable annuity. By not allowing me to exchange out of a fund holding US assets no question of stale prices or excessive fees that I am aware of with either of these funds you are taking the investment decision out of my hands, saddling me with higher risk, not lower risk, and if I read the other letters to you correctly, I will have higher fund expenses anyway after your rule is implemented. What are you thinking? Nancy Crain