Beware of Wall Street's Latest Fad

摘要

STRUCTURED NOTES PROMISE THE UPSIDE OF STOCKS WITH LITTLE RISK. DON'T BELIEVE THE HYPE. GIVEN THE WRENCHING market volatility in recent weeks, the idea of shielding your portfolio from a big decline while still being able to profit from future gains sounds mighty appealing. That's the promise of the so-called structured note, a product that's been popular with institutional investors for years. Now Wall Street is aggressively marketing these notes to individual investors. And retail sales of structured notes are booming: They increased by 46% in 2010 to a record $49.4 billion, according to Bloomberg, and are on track to be up again sharply in 2011.