These are tough times to recommend safe investments!
Eight years of ultra-low interest rates have driven bond yields down far below the rate of inflation – and pushed asset prices up to truly unsustainable levels.
The economy and the investment markets aren’t moving in tandem one bit. In fact, if the Dow Jones Industrial Average only rose in line with nominal gross domestic product (GDP), the index should be trading around 9,000.
In reality, it’s close to double that level.
Ordinary certificates of deposit (CDs) seem likely to actually lose money, as inflation checks in higher than current yields. Meanwhile, bonds only offer the prospect of slightly higher yields, yet they come with genuine principal risk.
Against such a backdrop, it’s tempting to believe there are no real solutions. But that’s where this new certificate of deposit from our friends at EverBank comes in.
Guaranteed Principal Safety… Boundless Upside Potential
The MarketSafe® Currency Comeback CD is a fascinating CD that offers an excellent alternative to traditional certificates of deposit.
It comes with several key benefits that are perfectly geared to this uncertain market. Including…
- Foreign Currency Exposure: The Currency Comeback CD helps provide a safeguard against a future decline in the U.S. dollar. While it’s denominated in U.S. dollars, this CD is indexed against five equally weighted foreign currencies. It includes the Australian dollar, Canadian dollar, Chilean peso, Mexican peso, and South African rand.
- Commodity Advantage: These five currencies are all in commodity-driven economies. So the currencies could benefit if today’s low commodity prices begin to rise again.
- Unlimited Upside: While a secure five-year Treasury note would yield only 1.16%, this CD offers unlimited upside potential.
- Minimal Risk: EverBank requires only a $1,500 investment to open the MarketSafe Currency Comeback CD. Plus, since EverBank is an FDIC member, the CDs are insured up to $250,000.
Perhaps the strongest benefit of all is EverBank’s Principal Protection.
You see, no matter what happens during the proceeding five years, EverBank guarantees your original deposit.
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So while the Currency Comeback CD offers unlimited upside, you risk absolutely nothing on your deposited principal – if you hold the CD to maturity.
Here’s how it works…
When It’s Time to Cash In…
At the end of the CD’s five-year term, if the five currencies have risen against the dollar on average, the CD will pay out a “market upside payment” of the average percentage rise in the currencies at maturity.
Again, if the currencies fall against the dollar on average, the CD buyer gets his deposited principal back.
But I think that the prospect for a market upside payment on the MarketSafe Currency Comeback CD is quite good.
Generally, currencies fluctuate around a trend line, so currencies that are weak in one period are often strong the next, returning to the trend.
So with these currencies currently trading at relatively low levels, now could be a good time to invest in the CD.
It diversifies you away from the stock market, while offering a greater potential return than bonds (and with no risk of principal loss, as you’d have in long-term bonds).
The minimum deposit is $1,500, to be funded by July 14. And the potential return at the CD’s maturity will be based on the movement of the five currencies between July 21, 2016 and July 21, 2017. No annual percentage yield or periodic rate of return is paid on this CD.
To view the term sheet and to get more information, you can visit EverBank’s website by going here.
Founder, Wall Street Daily
P.S. Since we’re always looking for new ways for readers to make money in the currency market, the Currency Comeback CD is exactly the type of investment we’d usually cover. However, in the interest of full disclosure, I’m required to tell you that Wall Street Daily has a paid marketing relationship with EverBank.