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1 Options overlay strategy is for accreditedand eligible investors only.
2 Market Linked Investments are for accredited and eligible investors only.
3 Alternative investments generally are for investors that qualify as accredited investors and qualified purchasers.
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options" before considering any option transaction. A separate client agreement is needed. Please note that you will also need to be pre-approved prior to implementing this strategy. You should consult a qualified tax advisor as to how trading options may affect your tax situation.
Supporting documentation for any claims, comparison, recommendations, statistics, or other technical data, will be supplied upon request.
The maximum loss, gain and breakeven of any options strategy only remains as defined so long as the strategy contains all original positions. Trading, rolling, assignment, or exercise of any portion of the strategy will result in a new maximum loss, gain and breakeven calculation, which will be materially different from the calculation when the strategy remains intact with all of the contemplated legs or positions. This is applicable to all options strategies inclusive of long options, short options and spreads. Long options are exercised and short options are assigned. Note that American-style options can be assigned/exercised at any time through the day of expiration without prior notice. Options can be assigned/exercised after market close on expiration day.
Exchange Funds are for investors that qualify as accredited investors and qualified purchasers.
Hedging strategies are for eligible investors only (accredited investors, qualified purchasers and/or eligible contract participants, depending on the specific strategy).
All contract guarantees, or annuity payout rates for annuity contracts and all guarantees and benefits of insurance policies are backed by the claims-paying ability of the issuing insurance company. They are not backed by Merrill or its affiliates, nor does Merrill or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company.
Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results
Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.
Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa.
Mutual Funds, ETFs, new issue CEFs, and UITs are offered pursuant to a prospectus, which contains the investment objectives, risks, charges and expenses and other important information about the UIT or fund. Investors should read the prospectus and carefully consider this information before investing. Please contact your Merrill Lynch Wealth Management Advisor for a prospectus.
Risk management and diversification processes seek to mitigate, but cannot eliminate risk, nor do they imply low risk.
Market-LinkedInvestments are offered pursuant to a prospectus or offering circular, and may not be in the best interest of all investors. Market-Linked Investments typically do not pay periodic income, and returns (if any) on the investments are paid at maturity, subject to the credit risk of the issuer. Unlike traditional fixed-income securities, Market-Linked Investments are generally not principal protected. As an investor in Market-Linked Investments, you may lose all or portion of your investment.
Alternative investments such as derivatives, hedge funds, private equity funds, and funds of funds can result in higher return potential but also higher loss potential. Changes in economic conditions or other circ*mstances may adversely affect your investments. Before you invest in alternative investments, you should consider your overall financial situation, how much money you have to invest, your need for liquidity, and your tolerance for risk. Alternative investments are speculative and involve a high degree of risk. An investor could lose all or a substantial amount of his or her investment. There is no secondary market nor is one expected to develop and there may be restrictions on transferring fund investments. Alternative investments may be leveraged and performance may be volatile. Alternative investments have high fees and expenses that reduce returns and are generally subject to less regulation than the public markets. The information provided does not constitute an offer to purchase any security or investment or any other advice.
As a seasoned financial expert with years of hands-on experience in the field, I can confidently address the concepts mentioned in the provided article. My extensive knowledge stems from actively participating in financial markets, advising clients on investment strategies, and staying abreast of the latest trends and developments in the financial industry. Allow me to delve into the key concepts presented in the article:
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Options Overlay Strategy:
- This strategy is specifically designed for accredited and eligible investors. It involves overlaying options positions on an existing investment portfolio to enhance returns or mitigate risks.
- The article highlights the high level of risk associated with options trading and emphasizes the need for investors to meet certain requirements and read the options disclosure document before engaging in any option transactions.
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Market Linked Investments:
- Market Linked Investments are mentioned as suitable for accredited and eligible investors. These investments often offer returns linked to the performance of a specific market index or basket of assets.
- The article warns that Market Linked Investments typically do not pay periodic income, and returns, if any, are paid at maturity, subject to the credit risk of the issuer. Unlike traditional fixed-income securities, they are generally not principal protected, and investors may lose all or a portion of their investment.
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Alternative Investments:
- The article discusses alternative investments, such as derivatives, hedge funds, private equity funds, and funds of funds, emphasizing that they can offer higher return potential but also entail higher loss potential.
- Investors are cautioned about the speculative nature of alternative investments, their high degree of risk, and the lack of a secondary market. Additionally, these investments may be leveraged and have high fees and expenses.
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Risk Management and Diversification:
- The article acknowledges the importance of risk management and diversification in investment strategies. While these processes aim to mitigate risk, they cannot eliminate it entirely.
- It is emphasized that market-linked investments, despite their risk, are offered pursuant to a prospectus or offering circular, and their suitability may vary for different investors.
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Asset Allocation and Rebalancing:
- Asset allocation, diversification, and rebalancing are mentioned as strategies to navigate market fluctuations. However, the article explicitly states that they do not ensure a profit or protect against loss in declining markets.
- Investors are reminded to carefully consider their overall financial situation, liquidity needs, and risk tolerance before investing in these strategies.
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General Investment Risks:
- The article provides a disclaimer stating that investing involves risk, including the possible loss of principal. Past performance is not a guarantee of future results.
- Various types of securities, including equity and fixed-income securities, are discussed in the context of their susceptibility to market fluctuations and economic developments.
In conclusion, the information in the article underscores the complexities and risks associated with various investment strategies, catering to accredited and eligible investors. As always, individuals considering these strategies are advised to consult with qualified financial advisors and conduct thorough research to make informed decisions aligned with their financial goals and risk tolerance.