Mark J. Warshawsky is Director of Retirement Research at Towers Watson.

Dr. Warshawsky served as assistant secretary for economic policy at the U.S. Treasury Department from 2004-2006 and he has held senior level economic research positions at the Federal Reserve Board, the Internal Revenue Service and TIAA-CREF.

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.

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:

Canadian insurer Sun Life recently announced that it will exit the variable annuity and individual life insurance markets in the United States.

Continued equity market volatility has resulted in a variable annuity business that is plagued with uncertainty and higher costs.

Insurers such as Sun Life offer guarantees that are linked to the performance of underlying equity portfolios.  These guarantees are a liability for the insurance company, and equity market volatility contributes to the cost of these liabilities.

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:

The following is a summary of stories related to the recent earnings warning from Canadian financial services company Sun Life.

A very interesting article from Financial Times columnist David Stevenson suggests that investors are making the very common mistake of missing sight of the forest for the trees. 

In this case, the trees are the daily ups and downs of the stock market.  Market volatility naturally draws many people into a sort of short-term obsession with undulating asset prices and portfolio values. 

The Wall Street Journal recently published an interview (see the video below) with entrepreneur and Dallas Mavericks owner Mark Cuban.

The interview is interesting for a number of reasons.  Cuban talks about investing his own money and he offers some suggestions for regular, non high net worth investors. 

In a nutshell, Cuban strongly believes that the “buy and hold” approach to investing is a worthless strategy.

Retail investors in the U.S. have been exiting in droves in light of the extreme market volatility. 

A Bloomberg article hits the nail on the head when questioning the psyche of the average U.S. fund investor. 

Mutual fund flows indicate that the damage to psyches is real and lasting: 

Retirees have every reason to be an extremely risk averse bunch.  After all, most of them have an immediate or near-term need to draw income from their assets.  This need for income should result in zero tolerance for investment risk or reduction in value of the assets that are intended to produce the retirement income.