Volatility is a measure of how the price of an asset – be it a stock, an option or a fund - changes. Volatility tracks how much the price moves and also how fast it changes. Beta is a commonly used statistical measure that represents volatility, and the higher beta is, the greater the risk. There’s usually a reference index such as the S&P 500 and if a stock perfectly tracks the index, it is said to have a beta of 1.0. If it changes more than the index, be it on the up or downside, it is a high beta stock. For example, a stock with a beta of 1.5 means that historically, it has moved 150% for every 100% move in the benchmark index. Mutual funds nowadays provide free volatility measures so you can get a good feel for how stable the fund is year in and year out.

Fixed Annuity Sales Continue to Soar While Massive Inflation Risks are Ignored

Bloomberg reports that there is continued strength in fixed and immediate...

New "Hybrid" Products Combine Traditional Investments with Insurance that Guarantees Income

Traditional asset allocation and many target date mutual funds have not served retirees and near-retirees well during the financial crisis. Many in the asset management community are realizing that diversification and asset allocation are not sufficient. Largely in response to the crisis, several companies are rolling-out new products that combine traditional asset management and insurance . These "hybrid" products use insurance to create a base income that is guaranteed for life and is not...

Cost of “Insurance” Seen Skyrocketing through Option Costs on CBOE

The cost of downside protection in the financial markets as seen through option costs on the CBOE has been skyrocketing as a result of the turmoil and volatility from the financial crisis. Contracts to protect against a decline in the Standard & Poor’s 500 Index for two years cost $15,160 on the Chicago Board Options Exchange at the end of last week, compared with $6,875 in 2007, according to price-adjusted data compiled by Bloomberg. The current level shows traders expect the...
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How can an annuity protect me from a volatile market?

Annuities can be very effective in providing protection against market volatility.

There is a very good article on that site that discusses how owners of certain types of variable annuities have been insulated from many of the effects of the financial crisis.  That article can be found by clicking here.

I am in my 30s -- is there any reason I would buy an annuity now? My advisor has suggested it.