Who can really blame investors for wanting to keep more of their money. I certainly can't do much more than suggest that these folks are probably spending money, in an effort to not lose any.

We are currently in a really bad stretch in the stock market. We are coming out of it slowly but surely without Washington's help. And in most cases, in spite of it. War will certainly ding our optimism. Life will go on. In another time and place you once probably thought that markets could only go up.

Investment firms realize that you are no longer so enthusiastic about committing your money. You understand what you once lost and you didn't much like the feeling. So you decide that anything you save from now on must be protected. In other words, you have identified your risk level once again.

Principle protected funds, notes and annuities are similar in one way. Cost. These investment tools have no edge whatsoever. This lack of risk will cost the average investor a good deal of upside in a recovering market. Mutual funds sold like this often are exposed to only 1% of the stock market with the rest in bonds. Notes offer more in the way of promised returns but require you to hold the note for a fixed period to become eligible for any gains. Annuities, a product that I have a personal loathing for, have protection policies in some offerings. But there are all sorts of conditions and limits placed on withdrawals and investments, making the effort not worth it.

Did I say cost? Let's not forget the expenses. The fees involved in these types of investments are so hefty, these types of products come with a strong warning to avoid. Any investment that costs an average of 2.5% a year to run with sales charges of 5% an up is no place for the average investor.

This is protection from potential market upsides while paying to protect your money from downsides. You will end up close to even.

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