Market Profits without Market Risk
Our Mission at Marketlinking.com is to provide consumers with factual and timely information about market linking and its role in retirement planning and other forms of wealth accumulation. There has been a great deal of misinformation about these products so we cover both the pros and cons and display as much current information on the various products available as we can find. We also provide an open discussion forum, detailed performance studies and suggested wealth strategies from financial experts. Contrary to what is often presented on the web, when done properly, market linking (a.k.a. index linking) is a proven concept that can play a key role in a variety of capital accumulation strategies. Because some of the available products feature high commission we have found that much of the market linking sales force is overly aggressive. Our solution to this issue is to provide unbiased facts and comparisons so you can make informed decisions about market linking and market/index linked products.
What is a Market Linked CD??
A market linked account is an interest bearing account with an equity ‘kicker’. The principal is never at risk. The account principal earns interest, but instead of paying that interest directly to the account owner, some or all of the interest is used to purchase an equity hedge (e.g. stock call option). A hedge is what businesses use to protect themselves from unexpected swings in financial and commodity markets. When the market rises the profits from the hedge are added to your account as additional interest. If the market declines, the interest spent on the hedge portion of your interest is lost. However, your principal is never in the market and never subject to market loss.
Market linked CDs have been getting slammed in the popular press recently. But the criticism is far too broad brushed to be useful. Some market linked CDs, also known as structured CDs, deserve to be castigated because of their high loads and amateurish construction. Others, however, offer sound investment opportunities.
The Truth Revealed
Carefully selected market linked CD’s can be a 'silver bullet' for mid-term savers, retirement investors and IRA owners.
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