In a Fortune article titled “Why Stocks Beat Gold and Bonds,” Warren Buffett provides a glimpse of his upcoming shareholder letter.

While Buffett’s advice is perfect for investors who have a long-term perspective, anyone near or in retirement may want to think twice about acting on the prescription.

The core of Buffett’s advice is as follows:

The world is filled with investing indexes and benchmarks, and all professional investment managers measure their results relative to some type of performance standard such as the S&P 500.

On the retirement income front, though, similar gauges of performance are virtually non-existent.  The lack of a baseline performance measure is a problem for the industry because there is no established basis for comparison of asset decumulation strategies.

Pacific Investment Management Company (Pimco) founder and co-chief investment officer Bill Gross offered a revised view of the global investing landscape in a letter published on the company’s website. 

As the manager of the Pimco Total Return Fund, Gross’s 2011 investment decisions were driven in part by the “new normal” thesis. 

The new normal view suggests that investors should seek emerging market debt because developed countries will experience a prolonged period of sluggish growth, high unemployment and inflation. 

Congress is considering an alternative inflation measure as part of its deficit reduction initiatives.

The alternative inflation measure is known as the chained consumer price index or chained CPI.  The chained CPI includes an adjustment mechanism that presumably accounts for consumers switching to substitute goods and services when a similar category of goods or services experiences rapid price increases.

The overall result of this adjustment for substitutes is a price index that that increases at a slower pace than other price indexes such as the CPI-W or CPI-U.

One way to evaluate a pension buyout involves determining what your future pension payments are worth today and then comparing that value to the buyout offer.

In other words, compare the lump sum pension buyout offer to what would you have to pay today to buy and annuity that locks-in a future stream of income that lasts for the rest of your life.

A price index such as the consumer price index (CPI) is intended to provide a rough gauge of the general direction of prices in the economy.

An increasing consumer price index represents price inflation while a decreasing price index may provide an indication of deflation.

John Hancock Annuities announced the release of a new fixed annuity product that provides owners with inflation protection. 

The “Inflation Guard” product offers principal protection through a fixed interest rate that is guaranteed through the first year of the contract. 

After the first year, the interest rate is floating.  This floating rate is based on a rate of inflation that is derived from the year-over-year change in the Consumer Price Index-Urban or “CPI-U.”  

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.

A recent paper sponsored by the Society of actuaries provides an impressive and comprehensive review of retirement income-related research. 

The paper, titled Research and Reality – A Literature Review on Drawing Down Retirement Financial Savings, can be accessed by clicking here. 

Japan’s experience over the past 20 years provides solid support for those who believe that there is a causal link between demographics and deflation.

As societies such as Japan age, the large numbers of people approaching retirement tend to save more and consequently spend less on current consumption.  The thinking is that this type of large-scale deferred consumption can lead to price decreases.

For anyone interested in exploring this issue further, David P. Goldman produces some very interesting content on the topic.