Complexity Is the Investing Devil
What do the following investments have in common?
- Covered calls
- Collateralized mortgage obligations
- Non-traded REITs
- Master limited partnerships
- Variable annuities
- Equity-indexed annuities
- Hedge funds
- Principal protected notes
- Private equity
Here’s the answer: They are all complex investments. As a result, assessing the risks involved with owning these investments can be challenging. They also generate meaningful commissions for the brokers who sell them so enthusiastically.
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