Stable Value Funds are popular choices in retirement plans in general. They are usually marketed as vehicles investing in high quality fixed income securities with a focus on safety of principal and consistent returns. Many investors are attracted to the “guaranteed returns”. However, guaranteed does not mean risk-free. The guarantee is only as good as the party providing the guarantee.

When FDNY Firefighters and NYPD Police Offers retire their investment opportunity set is no longer limited to what is available in the NYC Def Comp Plan and the Union Annuity Plans. However, the increase in flexibility also increases the risk of stepping on an investment landmine.

We will examine how a market timing strategy can backfire.