Buffer Protection Investment Solutions – Probably Work the Same Way as a Balanced Portfolio Long Term.

A few weeks ago, I came across the work of AQR’s Cliff Asness on Buffered Strategies. Buffered Strategies is a group of products that want to earn equity-like returns but with safety net that reduce the downside. Most investors are less sophisticated, and emotionally cannot take volatility to the downside. If you have products that give you decent returns but make your investment more livable emotionally, would you be interested? I think many would, which is why I think buffered strategy products is going to get more popular. But AQR’s Cliff Asness argues that: We are overcomplicating things. These buffered products are costly, but most importantly, many investors didn’t realize they could achieve the same effect by investing in a higher fixed income allocation portfolio. He thinks that we are overly complicating things. I do agree with Cliff. I think there aren’t much visible differences to that significant degree for…