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The concept is seductive: a financial product that provides upside exposure in the event that equity markets trend up and to the right while also providing a floor of protection in case the bottom falls-out from under markets again.

Sort of like having your cake and eating it too. Very tempting in light of the massive financial uncertainty that has existed for the past several years.

Products playing into this “upside plus protection” theme include (but are not limited to) variable annuities with guaranteed...

In his most recent Investment Outlook letter, PIMCO founder Bill Gross suggests that investors need to prepare for difficult adjustments in a world of near zero real returns from financial capital. 

Gross describes the dying cult of equity that has evolved over the past century, and advises readers to expect future equity returns that are much less than 6.6 percent average real return (the “Siegel constant”) since 1912. 

Gross considers the 6.6 percent real return on stocks since 1912 to be an “historical freak, a mutation likely never to be seen again as far as we mortals are concerned.” 

This view is based in part...

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In a recent Barron’s interview, Ray Dalio discusses financial deleveraging and makes an interesting point about the relationship between nominal interest rates and...

Laurence Kotlikoff is a Professor of Economics and Boston University. Professor Kotlikoff is one of the nation’s leading experts on fiscal policy, national saving and personal finance. 

Professor Kotlikoff is the author or co-author of 15 books and he publishes extensively in newspapers, magazines and blogs on issues of personal finance, financial reform, taxes,...