Do you want to own gold and silver… but you can’t stand the downside risk?
The downside risk is very real in metals… For example, the price of silver has fallen from near $50 to below $35 in less than three weeks. If you had invested $10,000 at the top, it would be worth less than $7,000 just three weeks later.
If you are seriously worried about the downside risk, I have a solution for you today…
This weekend, I spoke at the Global Currency Expo conference in stunning La Jolla, California. And I heard several new ideas that might interest you.
[ad#Google Adsense 336×280-IA]The first was EverBank’s new Timeless Metals MarketSafe CD.
It’s a bank CD, which means your principal (your initial investment) is 100% insured by the FDIC. So your downside risk is basically zero.
For your upside, instead of earning a tiny interest rate like a typical bank CD, you could earn up to 50% over the next five years.
Downside? Zero. Potential upside? 50%. I like those odds…
To me, investing is all about risk and reward. You’ll often hear me say I want to have at least three times the potential reward as the amount of risk I’m taking. In this case, with downside risk at essentially zero, you have many times that ratio.
Here’s how it works…
You buy the Timeless Metals MarketSafe CD. It has a five-year term, so your money is tied up for five years. It buys equal amounts of gold, silver, copper, platinum, and nickel. And in five years, you get your initial investment back, plus whatever the gain is in each of these commodities. The only catch is the gains are capped at 50%.
Let’s consider some examples…
If you invest $10,000 in this CD, and each metal rises 25%, you get $12,500 back in five years. If each metal rises 50%, you get $15,000 back. If each metal goes up 75%, then you only get $15,000 back. (Remember, your gains are capped at 50%, for EACH metal.)
On the downside, if each metal falls by 50%, you still get your initial investment of $10,000 back.
What’s your risk here?
[ad#article-bottom]It’s only two things… time and opportunity cost. Your money is tied up for five years. If you need it early, there’s an early withdrawal charge, and your principal is not guaranteed. As for opportunity cost… remember, your upside is capped at a 50% gain in each metal. If metal prices go to the moon, you don’t participate in the moonshot.
Still, I don’t know of many insured CDs with the potential for a 50% gain.
This product might not be right for everyone. But for people who simply can’t afford the risk of their principal going down, but still want to participate in the metals markets, it might be worth checking out…
I’ll share more ideas from La Jolla soon. But for now, here’s a link to the details on this no-downside-risk metals CD.
Good investing,
— Steve Sjuggerud
[ad#jack p.s.]
Source: Daily Wealth