We had a good run.
For months, the market headed in one direction: up.
Making money in the stock market was significantly easier. Nest eggs grew. Retirement and extravagant vacation plans for the future seemed more possible.
But then we reached a peak on January 26. The S&P 500 Index tagged an intraday high of 2,872 and hasn’t returned. The market has since trended sideways, largely trapped between 2,800 and 2,600.
The S&P 500 Index is flat for the year. So is the Dow Jones Industrial Average.
Meanwhile, the Dollar Index has dropped nearly 3% as the currency weakens against many other currencies around the globe.
That’s not a great combo.
But as the stock market grows more fickle, there are some critical steps you can take that may help reduce your risk and grow your wealth…
Beyond Wall Street’s Games
Investors are anxious, and with good reason. The market has enjoyed a stellar run over the past several years. No one wants to see that come to an end. And certainly no one wants to give up the gains they’ve earned.
But we have the U.S. president and China swapping barbs and tariffs, which is unsettling investors.
The Congressional Budget Office announced the U.S. budget deficit will top $1 trillion by 2020. That’s two years earlier than previously forecast. A ballooning deficit doesn’t help anyone sleep at night.
While stocks are struggling to find a direction, it is critical to take a hard look at your portfolio now and make sure that you are properly considering diversification. It goes right back to the old adage about putting all your eggs in a single basket.
There’s more than one avenue available when it comes to the potential for making a profit in this market.
In fact, did you know that crude oil is already up nearly 12% this year?
And Saudi Arabia is pushing to get oil back up to $80 a barrel to support its policy agenda and the planned initial public offering for Aramco, the state-owned oil company. With Brent crude trading around $70 a barrel, that’s another 14% gain.
A Different Kind of Investment
Diversifying your investments outside of just stocks could help you to weather volatility in the market. One asset that you should potentially consider is a variety of currencies.
EverBank, a division of TIAA, FSB, Member FDIC, has recently made available the Petrol Currencies MarketSafe® CD.
This indexed, U.S. dollar-denominated certificate of deposit features a potential Market Upside Payment based on the equally weighted performance of four currencies from petrol-rich countries, versus the U.S. dollar over the CD’s three-year term.
The CD’s performance is not linked to the price of oil, but to the average performance of these underlying currencies. These countries have significant exposure the petroleum market.
The CD’s performance is tied to:
- The Brazilian real.
- The Canadian dollar.
- The Mexican peso.
- The Russian ruble.
The measurement of the currencies’ performance is point to point — from start of the CD’s term to maturity. What’s more, the three-year CD offers the potential for enhanced earnings via a 2.0 leverage factor. That’s double the return.
For example, if the currencies return an average gain of 9.52%, you would actually see a gain of 19.04% at the end of the three-year period. (There is no periodic interest or annual percentage yield. Payment is only at maturity at the end of the three years.)
And what happens if the overall return at the end of the three-year period is negative?
You get 100% of your deposited principal if the CD performance is less than or equal to 0%. There’s no risk to your original investment.
For full details, important disclosures and potential payout examples, click here to read the term sheet for the Petrol Currencies MarketSafe® CD. The deadline to fund the Petrol Currencies MarketSafe® CD is April 19.
For the sake of full disclosure, we receive a marketing fee based on our relationship with EverBank. But, honestly, we’d work with them regardless.
Don’t miss out on this unique opportunity!
Sr. Managing Editor, Banyan Hill Publishing