Heres what I suggest. First, dont buy any more. Keep some money available and start learning. Second, move your money out of the non-index funds and put it all in the index. This will reduce the total expense burden and increase the odds of enjoying superior performance. Third, when you can start to move the money without penalty expenses, do a 1035 exchange to a low cost variable annuity such as the Vanguard Variable Annuity, reducing expenses further.

Next weeks mailbag, no doubt, will bring still more e-mail from people defending variable annuity products. Mostly because they sell them. The most common defense is that the benefits of tax deferral can cost virtually nothing if you compare the total cost of a VA to, say, the cost of broker distributed mutual fund B shares.