The term de-risk has been appearing frequently in recent financial news. 

General Motors’ recent decision to offer lump-sum pension buy-outs to 42,000 retirees is an attempt to reduce the company’s pension obligations with the hope of returning GM to investment grade status in the eyes of rating agencies. 

It seemed obvious several years ago that retirees would shoulder much of the burden of the financial crisis and its residual effects.

While events have generally played-out in line with this projection, the backlash from seniors has been surprisingly subdued.  The lack of pitchforks seems odd given the fact that the number of retirement age voters is increasing by 10,000 each day in the United States.

A recent article published in the Financial Analysts Journal examines the relationship between demographics and both economic growth and capital market returns.

The authors—Robert Arnott and Denis Chaves—use a new econometric technique to confirm a strong link between demographic trends and: excess (in excess of returns on domestic cash) stock market returns; excess bond market returns, and; real per capita gross domestic product (GDP).

Warren Buffett’s most recent shareholder letter focuses on the merits of productive assets such as equities in light of the current low interest rate environment and the potential for future inflation.

Buffett’s view is that although productive assets are variable and volatile, they are more likely to preserve future purchasing power than the fixed or currency-based alternatives.

New China Life is seeking to raise $2.3 billion in an initial public offering that would list the company on exchanges in Shanghai and Hong Kong.

New China Life is seeking the capital in market conditions that have been challenging for many of its peers.

China Life Insurance Company and Ping An Insurance have both seen their stock prices decline over 30 percent this year.  China Pacific Insurance Group has dropped more than 20 percent this year.

Recent data indicate that wages and salaries as a share of national income have fallen to the lowest level since 1948—a time when the government began to collect the data.

During the third quarter of 2011, wage and salary compensation represented 49.4 percent of national income.

Meanwhile, Bloomberg reports that the profit margins of U.S. companies are at the highest level in 40 years.

The profit margins of non-financial companies in the United States reached 15 percent during the third quarter of 2011.  This is the highest level since 1969.

“Trees grow” is an adage that has stuck with me over the past several years.

In a post financial crisis interview, a successful investment manager was talking about his decision to load-up on Citigroup and a handful of other banks in early 2009 when the decision to do so was difficult to say the least.

I am currently researching and am likely to purchase an indexed universal life insurance product.  This first-hand research and learning process has been interesting and is worth sharing.

In a nutshell, some of the key characteristics of indexed universal life insurance include:

Defined benefit pension plans are the traditional and increasingly rare type of pension plans offered through employers.

In contrast to defined contribution pension plans such as the 401(k), participants in defined benefit (“DB”) plans receive contractually guaranteed income and assume none of the risks (investment risk, interest rate risk, longevity risk, etc) associated with producing that lifetime income stream.

The problem is that defined benefit plans are scarce, and many of those that do still exist are in tough shape.

While it might be an unusual time to provide an explanation of Swiss annuities given what has been taking place of late with the Swiss franc and related decisions made by the Swiss National Bank, it still makes sense for any financial services consumer to understand potential benefits of these products.