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Products such as index annuities, structured notes and buffered ETFs might seem appealing because of their promised upside and limited downside, but sometimes they can rob you of flexibility and trap your capital.
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By
Mike Palmer, CFP
published
13 December 2025
in Features
In the past decade, Wall Street has churned out a flood of financial products aimed directly at retirees — the biggest, wealthiest and most fearful generation of investors.
These products, which include buffered ETFs, structured notes and fixed index annuities, have earned the fitting nickname "Boomer Candy."
They sound irresistible: Participate in the stock market's upside with limited or no downside. But if a financial product sounds too good to be true, it usually is.
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Sign upWall Street excels at creating financial products that benefit them — all while making them appear to be good for investors.
Boomer Candy products are designed to make money for the bank, brokerage firm or insurance company that creates them, no matter what happens to you. The fee structure of many of these products make it difficult to understand their true cost.
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The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
When you unwrap these shiny financial candies, you discover a dangerous, overlooked flaw that can cost you thousands of dollars: point-in-time valuation.
The danger of point-to-point pricing
The hidden structural risk common to virtually all Boomer Candy products is that your entire investment return is determined as of a specific date.
Your investment's performance is locked in based on the market's value on just one day — a single point in time, or what's called point-to-point valuation.
This is a massive disadvantage because it robs you of one of your most valuable investment assets: flexibility.
The problem with noise and chance
Nobel Prize-winning economist Eugene Fama has shown that there is far more "noise" and "fat tails" in daily stock prices than in monthly, quarterly or annual returns.
What does that mean for you? If your return is based on just one day's value, it becomes more determined by chance — a single bad trading day, a sudden headline or a temporary market drop — than by the long-term fundamentals of capital markets.
Don't get handcuffed
Consider the difference:
If you own an S&P 500 ETF. If the market drops 5% on a Tuesday, you have the choice to be patient. You own small pieces of hundreds of diversified businesses; their value is still there. You can afford to wait months for the recovery.
With Boomer Candy. You own an IOU with an insurance company, bank or brokerage firm, not a collection of businesses. When the contract term ends — be it six months, one year or two — your return is locked in, like an auctioneer banging a gavel on a final, non-negotiable price.
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The structure of the product forces your investment to be valued on a single, potentially terrible, closing bell. You don't get the benefit of being a long-term investor, because the contract mandates a series of short-term, single-day valuations.
The Warren Buffett analogy
To grasp the severity of this inflexibility, let's take a lesson from the Oracle of Omaha, Warren Buffett.
Buffett is famous for his baseball metaphor: Great investors approach investing like a great hitter, such as Ted Williams, but with the added luxury of no umpire calling balls and strikes.
If you can be patient and wait for the perfect, fat pitch before swinging, you dramatically increase your odds of success.
But with point-in-time valuation, it's like being forced to swing at the third pitch, no matter where it is — high, low or in the dirt. You're obligated to lock in your return on a pre-set date, even if the market is experiencing a temporary, steep decline.
The bottom line: Loss aversion vs structural risk
Advisers selling Boomer Candy products promote the limited downside, leveraging a behavioral finance concept known as loss aversion — the fear of short-term losses. This can be a powerful motivator, especially for retirees.
But they fail to mention that while they protect you from a portion of market risk, they introduce a hidden, structural risk: point-in-time valuation risk.
If you invest in any financial product that automatically determines your return as of a specific date, you are fundamentally decreasing your flexibility, increasing your risk due to short-term noise and ultimately, lowering your odds of investment success.
Your retirement capital is too important to be handcuffed to a valuation trap at the worst possible time.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
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Mike Palmer, CFPManaging Principal, Ark Royal Wealth ManagementMike Palmer has over 25 years of experience helping successful people make smart decisions about money. He is a graduate of the University of North Carolina at Chapel Hill and is a CERTIFIED FINANCIAL PLANNER™ professional. Mr. Palmer is a member of several professional organizations, including the National Association of Personal Financial Advisors (NAPFA) and past member of the TIAA-CREF Board of Advisors.
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