Derivatives are financial instruments that derive value from an underlying something--be it assets stocks, bonds, interest rates, commodities, real estate, currency, stock market indexes or even the weather. Options, swaps, futures and forwards are examples of derivatives. Derivative provide exposure to an asset without direct ownership of the asset. Derivatives are opaque, complex and in many cases lightly regulated. Professional investors use derivatives to speculate, hedge their bets, lock-in prices or leverage potential returns. For example, a gold futures contract gives you control over thousands of dollars of precious metal for a cash layout equaling a fraction of its total value. Since the 2008 global financial crisis, derivatives have been given bad press. As far back as 2002, Warren Buffett described them as “financial weapons of mass destruction.”
Anyone thinking about retirement income should pick-up a copy of Retirement Portfolios by Michael Zwecher. This recommendation applies to both financial...
An article on indexed annuities appeared in Bloomberg yesterday (click here to read).
The article is substantive and comes from a credible source. It is provides a good explanation of why surrender fees need to be a front-and-center consideration for any consumer considering the purchase of an...
