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What investment strategy is currently being hawked on FM radio commercials?
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up vote
2
down vote
favorite
I've heard similar radio commercials in multiple states now. A guy says he can teach you how to invest where you'll "get the full return in the good years, but be protected from crashes" (paraphrased). Does anyone know what type of "system" is being hawked right now, or is this not specific enough a question?
investment-strategies
asked 1 hour ago
WakeDemons3
312211
add a comment |Â
up vote
2
down vote
favorite
I've heard similar radio commercials in multiple states now. A guy says he can teach you how to invest where you'll "get the full return in the good years, but be protected from crashes" (paraphrased). Does anyone know what type of "system" is being hawked right now, or is this not specific enough a question?
investment-strategies
asked 1 hour ago
WakeDemons3
312211
1
What I would question is you'll "get the full return in the good years". My guess is that he is referring to the full amount of the product's cap rather than receiving the same return as the market. I could offer a number of ways for cap plus protection but there is no way that one can participate in the market 100% to the upside and not lose anything to the downside. Only a cap makes this possible (short changing the investor on some of the profit and making that the provider's profit).
– Bob Baerker
18 mins ago
add a comment |Â
up vote
2
down vote
favorite
up vote
2
down vote
favorite
I've heard similar radio commercials in multiple states now. A guy says he can teach you how to invest where you'll "get the full return in the good years, but be protected from crashes" (paraphrased). Does anyone know what type of "system" is being hawked right now, or is this not specific enough a question?
investment-strategies
asked 1 hour ago
WakeDemons3
312211
I've heard similar radio commercials in multiple states now. A guy says he can teach you how to invest where you'll "get the full return in the good years, but be protected from crashes" (paraphrased). Does anyone know what type of "system" is being hawked right now, or is this not specific enough a question?
investment-strategies
investment-strategies
asked 1 hour ago
WakeDemons3
312211
asked 1 hour ago
WakeDemons3
312211
asked 1 hour ago
WakeDemons3
312211
asked 1 hour ago
WakeDemons3
312211
asked 1 hour ago
WakeDemons3
312211
312211
1
What I would question is you'll "get the full return in the good years". My guess is that he is referring to the full amount of the product's cap rather than receiving the same return as the market. I could offer a number of ways for cap plus protection but there is no way that one can participate in the market 100% to the upside and not lose anything to the downside. Only a cap makes this possible (short changing the investor on some of the profit and making that the provider's profit).
– Bob Baerker
18 mins ago
add a comment |Â
1
What I would question is you'll "get the full return in the good years". My guess is that he is referring to the full amount of the product's cap rather than receiving the same return as the market. I could offer a number of ways for cap plus protection but there is no way that one can participate in the market 100% to the upside and not lose anything to the downside. Only a cap makes this possible (short changing the investor on some of the profit and making that the provider's profit).
– Bob Baerker
18 mins ago
1
1
What I would question is you'll "get the full return in the good years". My guess is that he is referring to the full amount of the product's cap rather than receiving the same return as the market. I could offer a number of ways for cap plus protection but there is no way that one can participate in the market 100% to the upside and not lose anything to the downside. Only a cap makes this possible (short changing the investor on some of the profit and making that the provider's profit).
– Bob Baerker
18 mins ago
What I would question is you'll "get the full return in the good years". My guess is that he is referring to the full amount of the product's cap rather than receiving the same return as the market. I could offer a number of ways for cap plus protection but there is no way that one can participate in the market 100% to the upside and not lose anything to the downside. Only a cap makes this possible (short changing the investor on some of the profit and making that the provider's profit).
– Bob Baerker
18 mins ago
add a comment |Â
3 Answers
3
active
oldest
votes
up vote
4
down vote
accepted
The one that I have heard of (others may be different) is a form of capital protection investment. The basic premise was that you received a percentage of positive returns and nothing if there was a negative return. So if, say, the S&P 500 was up 20% over 5 years, then you'd earn 15% on your original investment. If it goes down, you lose nothing. Others may allow for some loss in exchange for more upside, but the loss is limited to, say, 5%.
From their standpoint, they make money if the earnings they keep when the market is up are higher than the losses they have to cover when the market is down, then they profit. They also require that you keep the investment for a fairly long period of time so their chance of profiting is higher (since the odds of a loss are much lower the longer of a time frame you look at).
The expected return (on average) should be about the same as an annuity for the same period. There may also be significant risk of default if the company is not not backed by a large financial institution.
edited 55 mins ago
Bob Baerker
11.2k11643
answered 1 hour ago
D Stanley
46.4k7141150
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
add a comment |Â
up vote
1
down vote
I've heard similar radio commercials in multiple states now. A guy
says he can teach you how to invest where you'll "get the full return
in the good years, but be protected from crashes" (paraphrased). Does
anyone know what type of "system" is being hawked right now, or is
this not specific enough a question?
The system is:
- I will give you a broad hint of a method for free...
- For some money I will almost let you in on the secret...
- For a lot of money I will promise you exclusive one-on-one support..
- then after you pay I will describe a very obvious method, that you could have read about in a book in the library.
answered 1 hour ago
mhoran_psprep
62.8k885162
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
add a comment |Â
up vote
0
down vote
I'm sure there are hundreds of similar ads at any given time; for the most part, these people sell advice (through seminars, books, or management fees) that gives them more profit than if they simply invested their own money using their own systems. One conclusion you could come to from that fact, is that the systems may not be as surefire as they are advertising.
This doesn't mean that no paid investment advice is worthwhile, but it is a reminder to be careful of those who downplay or 'eliminate' risk, as they are likely to be snake oil salesmen.
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
add a comment |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
accepted
The one that I have heard of (others may be different) is a form of capital protection investment. The basic premise was that you received a percentage of positive returns and nothing if there was a negative return. So if, say, the S&P 500 was up 20% over 5 years, then you'd earn 15% on your original investment. If it goes down, you lose nothing. Others may allow for some loss in exchange for more upside, but the loss is limited to, say, 5%.
From their standpoint, they make money if the earnings they keep when the market is up are higher than the losses they have to cover when the market is down, then they profit. They also require that you keep the investment for a fairly long period of time so their chance of profiting is higher (since the odds of a loss are much lower the longer of a time frame you look at).
The expected return (on average) should be about the same as an annuity for the same period. There may also be significant risk of default if the company is not not backed by a large financial institution.
edited 55 mins ago
Bob Baerker
11.2k11643
answered 1 hour ago
D Stanley
46.4k7141150
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
add a comment |Â
up vote
4
down vote
accepted
The one that I have heard of (others may be different) is a form of capital protection investment. The basic premise was that you received a percentage of positive returns and nothing if there was a negative return. So if, say, the S&P 500 was up 20% over 5 years, then you'd earn 15% on your original investment. If it goes down, you lose nothing. Others may allow for some loss in exchange for more upside, but the loss is limited to, say, 5%.
From their standpoint, they make money if the earnings they keep when the market is up are higher than the losses they have to cover when the market is down, then they profit. They also require that you keep the investment for a fairly long period of time so their chance of profiting is higher (since the odds of a loss are much lower the longer of a time frame you look at).
The expected return (on average) should be about the same as an annuity for the same period. There may also be significant risk of default if the company is not not backed by a large financial institution.
edited 55 mins ago
Bob Baerker
11.2k11643
answered 1 hour ago
D Stanley
46.4k7141150
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
add a comment |Â
up vote
4
down vote
accepted
up vote
4
down vote
accepted
The one that I have heard of (others may be different) is a form of capital protection investment. The basic premise was that you received a percentage of positive returns and nothing if there was a negative return. So if, say, the S&P 500 was up 20% over 5 years, then you'd earn 15% on your original investment. If it goes down, you lose nothing. Others may allow for some loss in exchange for more upside, but the loss is limited to, say, 5%.
From their standpoint, they make money if the earnings they keep when the market is up are higher than the losses they have to cover when the market is down, then they profit. They also require that you keep the investment for a fairly long period of time so their chance of profiting is higher (since the odds of a loss are much lower the longer of a time frame you look at).
The expected return (on average) should be about the same as an annuity for the same period. There may also be significant risk of default if the company is not not backed by a large financial institution.
edited 55 mins ago
Bob Baerker
11.2k11643
answered 1 hour ago
D Stanley
46.4k7141150
The one that I have heard of (others may be different) is a form of capital protection investment. The basic premise was that you received a percentage of positive returns and nothing if there was a negative return. So if, say, the S&P 500 was up 20% over 5 years, then you'd earn 15% on your original investment. If it goes down, you lose nothing. Others may allow for some loss in exchange for more upside, but the loss is limited to, say, 5%.
From their standpoint, they make money if the earnings they keep when the market is up are higher than the losses they have to cover when the market is down, then they profit. They also require that you keep the investment for a fairly long period of time so their chance of profiting is higher (since the odds of a loss are much lower the longer of a time frame you look at).
The expected return (on average) should be about the same as an annuity for the same period. There may also be significant risk of default if the company is not not backed by a large financial institution.
edited 55 mins ago
Bob Baerker
11.2k11643
answered 1 hour ago
D Stanley
46.4k7141150
edited 55 mins ago
Bob Baerker
11.2k11643
edited 55 mins ago
Bob Baerker
11.2k11643
edited 55 mins ago
Bob Baerker
11.2k11643
11.2k11643
answered 1 hour ago
D Stanley
46.4k7141150
answered 1 hour ago
D Stanley
46.4k7141150
answered 1 hour ago
D Stanley
46.4k7141150
46.4k7141150
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
add a comment |Â
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
As I mentioned in another comment, many structured Index products can be replicated with options. Of those I'm familiar with, cap is a function of a covered call but the pay out is less than the strike of the CC (insurance company keeps the excess gain in good years). Ins company pockets the dividends. Floor is a function of a long put vertical which indemnifies the investor (and insurance company) for "X" percent of the drop with "X" percent being derived from the width of the vertical. Below the vertical, the investor takes the hit. It's win-win for the insurance company, no matter what.
– Bob Baerker
34 mins ago
add a comment |Â
up vote
1
down vote
I've heard similar radio commercials in multiple states now. A guy
says he can teach you how to invest where you'll "get the full return
in the good years, but be protected from crashes" (paraphrased). Does
anyone know what type of "system" is being hawked right now, or is
this not specific enough a question?
The system is:
- I will give you a broad hint of a method for free...
- For some money I will almost let you in on the secret...
- For a lot of money I will promise you exclusive one-on-one support..
- then after you pay I will describe a very obvious method, that you could have read about in a book in the library.
answered 1 hour ago
mhoran_psprep
62.8k885162
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
add a comment |Â
up vote
1
down vote
I've heard similar radio commercials in multiple states now. A guy
says he can teach you how to invest where you'll "get the full return
in the good years, but be protected from crashes" (paraphrased). Does
anyone know what type of "system" is being hawked right now, or is
this not specific enough a question?
The system is:
- I will give you a broad hint of a method for free...
- For some money I will almost let you in on the secret...
- For a lot of money I will promise you exclusive one-on-one support..
- then after you pay I will describe a very obvious method, that you could have read about in a book in the library.
answered 1 hour ago
mhoran_psprep
62.8k885162
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
add a comment |Â
up vote
1
down vote
up vote
1
down vote
I've heard similar radio commercials in multiple states now. A guy
says he can teach you how to invest where you'll "get the full return
in the good years, but be protected from crashes" (paraphrased). Does
anyone know what type of "system" is being hawked right now, or is
this not specific enough a question?
The system is:
- I will give you a broad hint of a method for free...
- For some money I will almost let you in on the secret...
- For a lot of money I will promise you exclusive one-on-one support..
- then after you pay I will describe a very obvious method, that you could have read about in a book in the library.
answered 1 hour ago
mhoran_psprep
62.8k885162
I've heard similar radio commercials in multiple states now. A guy
says he can teach you how to invest where you'll "get the full return
in the good years, but be protected from crashes" (paraphrased). Does
anyone know what type of "system" is being hawked right now, or is
this not specific enough a question?
The system is:
- I will give you a broad hint of a method for free...
- For some money I will almost let you in on the secret...
- For a lot of money I will promise you exclusive one-on-one support..
- then after you pay I will describe a very obvious method, that you could have read about in a book in the library.
answered 1 hour ago
mhoran_psprep
62.8k885162
answered 1 hour ago
mhoran_psprep
62.8k885162
answered 1 hour ago
mhoran_psprep
62.8k885162
answered 1 hour ago
mhoran_psprep
62.8k885162
62.8k885162
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
add a comment |Â
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
I surely do not know the details of all Structured Index products offered by all insurance companies but I know of some where the investor is indemnified for at least 30% of downside protection (DP) in the value of the investment. AFAIC, the caps for most of these are inadequate. Many of these can be replicated with options. If done by the individual, the cap and/or DP will be significantly larger. I say and/or because you can tailor it for the same cap and get much larger DP or less DP and a larger cap, or a medium additional increment in both.
– Bob Baerker
43 mins ago
add a comment |Â
up vote
0
down vote
I'm sure there are hundreds of similar ads at any given time; for the most part, these people sell advice (through seminars, books, or management fees) that gives them more profit than if they simply invested their own money using their own systems. One conclusion you could come to from that fact, is that the systems may not be as surefire as they are advertising.
This doesn't mean that no paid investment advice is worthwhile, but it is a reminder to be careful of those who downplay or 'eliminate' risk, as they are likely to be snake oil salesmen.
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
add a comment |Â
up vote
0
down vote
I'm sure there are hundreds of similar ads at any given time; for the most part, these people sell advice (through seminars, books, or management fees) that gives them more profit than if they simply invested their own money using their own systems. One conclusion you could come to from that fact, is that the systems may not be as surefire as they are advertising.
This doesn't mean that no paid investment advice is worthwhile, but it is a reminder to be careful of those who downplay or 'eliminate' risk, as they are likely to be snake oil salesmen.
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
add a comment |Â
up vote
0
down vote
up vote
0
down vote
I'm sure there are hundreds of similar ads at any given time; for the most part, these people sell advice (through seminars, books, or management fees) that gives them more profit than if they simply invested their own money using their own systems. One conclusion you could come to from that fact, is that the systems may not be as surefire as they are advertising.
This doesn't mean that no paid investment advice is worthwhile, but it is a reminder to be careful of those who downplay or 'eliminate' risk, as they are likely to be snake oil salesmen.
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
I'm sure there are hundreds of similar ads at any given time; for the most part, these people sell advice (through seminars, books, or management fees) that gives them more profit than if they simply invested their own money using their own systems. One conclusion you could come to from that fact, is that the systems may not be as surefire as they are advertising.
This doesn't mean that no paid investment advice is worthwhile, but it is a reminder to be careful of those who downplay or 'eliminate' risk, as they are likely to be snake oil salesmen.
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
answered 1 hour ago
Grade 'Eh' Bacon
17.6k74766
17.6k74766
add a comment |Â
add a comment |Â
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1
What I would question is you'll "get the full return in the good years". My guess is that he is referring to the full amount of the product's cap rather than receiving the same return as the market. I could offer a number of ways for cap plus protection but there is no way that one can participate in the market 100% to the upside and not lose anything to the downside. Only a cap makes this possible (short changing the investor on some of the profit and making that the provider's profit).
– Bob Baerker
18 mins ago