Speaking at the 2011 Morningstar/Ibbotson Conference in Orlando, Roger Ibbotson (above) described low-liquidity as a largely unrecognized source of alpha in stocks and mutual funds.
A mountain biker needs 18 or 21 gears to smooth a path over rocks and through arroyos. Index-linked annuities now collectively offer some 140 index choices. Hybrid indices can theoretically smooth an investor’s path through rocky markets--but they're complicated.
Every June, RIJ focuses on indexed annuities. Last year, we studied options in indexed annuities. This year we consider the indexes themselves, especially 'hybrid' and 'volatility-controlled' indexes. Bryan Anderson, Don Dady and David Lau weighed in.
In this month's roundup, we learn that CEOs pay little attention to inflation. We also find out why retirees keep saving, why "centaurs" pick stocks so well, which financial biases keep people poor, and how working longer affects male mortality.
Of $136.6 billion in total sales, $21.5 billion represented new cash flow, up from $17 billion in 2009. But the net cash flow was the third lowest in 12 years, after 2005’s net flow of $20.4 billion.
The level of the S&P 500 and the size of the Fed’s balance sheet have a plus-88.4% correlation since QE1 started in March 2009, said TrimTabs.
“The spread between European and US short-term rates... presents the possibility of extracting value,” said Jose Mazoy, Director, Index Portfolio and Risk Solutions at Barclays Capital.
The new FIA's optional GLWB provides a compounded roll-up in the benefit base of 8.2% for each year the client defers income, for 10 years or until age 85, whichever comes first.
“Consumer demand for conservative investments with guarantees continues to be strong,” Beacon Research CEO Jeremy Alexander said. “We expect fixed annuity sales growth to resume when the rate environment becomes more favorable.”
A high court in Britain has apparently barred U.K. insurers from using gender as a factor in calculating insurance rates, including payout rates for retail income annuities. One expert observer predicted "unintended consequences."
Late-breaking items and briefs from Ernst & Young, Charles Schwab, Scarborough, Symetra, MassMutual, Lincoln Financial, Fidelity and Jackson National.
With the numbers of people over age 100 growing rapidly, there is an equally growing need for advisors to consider an array of retirement income solutions.
Jeffrey Brown, Ph.D., disagrees with Henry T.C. Hu and Terrrance Odean's proposal for a government-sponsored, inflation-indexed individual annuity. The proposal was reported in last week's issue of RIJ.