How To Bake a Better Investing Cake

How to Bake a Better Investing Cake
Designing an investment portfolio can be accomplished with success if you have the correct ingredients, follow the instructions, and remain disciplined. If you have a “homemade” recipe that’s been proven to work time after time – you are indeed ahead of the curve. Successful investing uses many of the same skills as baking a great cake.
I have never baked a cake from start to finish. I’ve helped people prepare to make a cake, and armed with bowls of sticky stuff and mixing whisks , assisted them with the work. A quick Internet search tells me I need sugar, eggs, milk, flour, etc. plus frosting to finish the job.

August Market-Linked CD's

Dear clients and friends:  
                                                                                             August 9 '12
The August Market-Linked CD offerings are interesting...the estimated caps on which the interest is paid are between 5% to 7%.

The commodity-linked CD this month featured below includes both GOLD and SILVER; CORN, NATURAL GAS, & WHEAT also - an excellent way to participate here without any risk to your deposit.
To get more information on these FDIC insured CD's, contact me at (954) 719-1151 , or reply to this e-mail. Thanks. Barry Unterbrink, Chartered Retirement Planning Counselor

Market-Linked Certificates of Deposit can be a smart solution in today’s environment.

With interest rates near historical lows, bonds and typical CDs no longer offer returns that can potentially outpace inflation.  Originally developed by Chase Manhattan bank in 1987, Market-Linked CDs (MLCDs) may be the solution you are looking for as one of the few principal-protected products still offering the potential for annual interest greater than 2.50%.
 
Potential benefits of MLCDs.
1.       Safety - Principal Protection.1
2.       Insurance - FDIC Insurance.2
3.       Potential - Historical interest paid = 2.75%.3
 
The Basics.
§  The issuing bank will return 100% of your principal at maturity.
§  Deposits are insured by the FDIC up to statutory limits, generally $250,000 per bank.
§  MLCDs pay interest each year based on the performance of stocks or commodities.4
§  Some Market-Linked CDs also offer minimum guaranteed interest (such as the one below).
§  If you need to sell your MLCDs prior to maturity the issuer will buy it back at the current market value.5
 
One Example.
§  Commodity Linked CD issued by Bank of the West.
§  Pays interest each year based on the performance of 10 Commodities (includes GOLD & SILVER,
§  Minimum interest will be at least 0.30% annually (GUARANTEED).
§  Maximum interest can be up to 6.5% annually (CAP).
§  This particular CD must be funded by August 24, 2012.
 
If you would like more information on MLCDs.
Please contact BARRY UNTERBRINK , Chartered Retirement Planning Counselor (954) 719-1151, barry@stetsonwealthmanagement.com (Fort Lauderdale, Florida)
 
The above summary is not intended to be an offer to purchase CDs.  Interested depositors should request full offering documents from their financial consultant.  1 MLCDs are 100% principal protected when held to maturity based on the credit strength of the issuer. 2 MLCDs are FDIC Insured up to statutory limits, which are described in detail in the offering documents, generally  up to $250,000 per bank, per account registration.  3 34 MLCDs on this platform have paid interest with an average payment of 2.75%, however past performance is not a prediction of future results as each MLCD offers different variables which will affect actual interest paid. 4 Interest is subject to a CAP.   5 If MLCDs are sold back to issuer prior to maturity, depositor may receive less or more than original deposit.

The Asset Allocation Advantage

The financial markets ended June and the first half of the year in an explosive fashion last Friday. Stocks rose two to three percent. Gold gained 3%, oil shot up 9%. Today, stocks are giving back some due to the weak employment report this morning. As June ended, the stock market averages could not pull positive for the second quarter; The Dow, SP500 and Nasdaq were off 2-5%. For the first half of 2012, the numbers show more strength; with price gains of 7-12%. To achieve those results, you needed to withstand reductions (drawdown) in your account value of 9-12% however.

It’s somewhat disconcerting in that the wild price swings have continued this year. A news announcement in Asia or Europe ripples across the time zones, and jerks our markets up and down. This often gives us reasons to question the validity of our investment strategies, and the strength of our stomachs. In the markets, when your money is invested, it's the journey along the bumpy road that will test your will and often de-rail your chances of achieving your goal. Another roadblock to our long term success: fear and greed. We’re wired in a way to avoid fear and crave success, which can turn to greed if not reality-checked. This usually leads to making poor decisions regarding our investments. It’s much better to have a plan, and then a backup plan also. The skittishness and price swings of the stock markets are forcing most investors to re-think the strategies of the past that have stopped working recently. The “buy-and-hold” approach with stocks and mutual funds has not produced decent enough gains to achieve many people’s goals the past 10-12 years.

One old-school paradigm that we agree is gaining steam is “asset allocation”; that is – designing a portfolio with specific allocations to stocks, bonds, metals, commodities, cash, and others that will perform well in most time periods, while lessening the big drawdowns in the overall portfolio, and provide some income. I’ve uncovered one such portfolio run in real time since the early ‘70’s that’s produced over 9% average* gain for 40 years; it has been implemented with our clients started last year. Ask me for details.