Oxford Club’s Alex Green explains how Wall Street’s supposedly safe structured products became an investor’s nightmare. In reality, they were just a gimmick. Alex says this just underscores why investors should be cautious of any product that comes with “guaranteed” returns.

This from InvestmentU:

Structured products are securities that are sold as an opportunity to enjoy substantial gains with full principal protection.

For example, an underwriter might offer investors the upside potential of the S&P 500 - or a substantial percentage of that upside - over a certain period of time (say, five years) while guaranteeing no less than full value of the initial investment at maturity, even if the index goes down.

(Or, instead of the S&P 500, the investment might be linked to Asian currencies, or commodities, or something else.)

How can you offer all or most of the upside of a risky investment with a principal