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Editor's Corner

These are certainly "interesting" times - and no I'm not referring to Janet Jackson's infamous wardrobe malfunction or Brittany Spears 24-hour marriage (or was it actually longer than that?) - I'm talking about interesting times in the financial markets. The market, and particularly the fixed income market, has been fascinating everyone as we remain on perpetual watch for signals that the Federal Reserve may normalize (raise) interest rates. But based on the most recent rhetoric, the Federal Reserve appears to want to stay on hold at one percent until they see the fruits of their reflationary efforts, and it looks like that may be a while!

That's not bad a bad thing for Stable Value investors. In fact, few environments really are considered bad for Stable Value, because Stable Value offers many benefits to retirement investors. Stable Value generally provides premium returns over money markets and short-term bonds. With the Federal Reserve in a holding pattern, Stable Value should continue to maintain its healthy premium over these alternatives. Stable Value also enjoys the benefits of less principal risk than longer term bonds should rates move up in response to future reports of job creation and/or inflation. And Stable Value provides diversification and stabilization that provides and anchor to a retirement portfolio that is facing volatile and "interesting" conditions.

In this edition of Stable Times we revisit why Stable Value remains a core holding for retirement investing - because it works! We include a review of the trends in Stable Value pooled funds and in Stable Value and funding agreement sales.

Consistent with our objective of addressing broader retirement issues and their implications on defined contribution and/or Stable Value investing, we explore the defined contribution systems in Chile, Germany and Canada and what opportunities may exist for their participants to share in the benefits Stable Value can offer.

In the US we also explore the pension issues that are likely to be in front of Federal legislators and regulators this year, and discuss the differences between 457 and 401(k) plans. And we try to shed some light on why competing funds pose concerns when offered alongside of Stable Value funds.

While I don't expect these stories will make the tabloids, I do think that our readership is likely to find them much more interesting, important, certainly more appropriate in their revelations, and lasting in their relevance!

Read Next: Results from Quarterly Stable Value Managers' Survey