Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Market Linked CDs
Old 04-18-2018, 07:00 AM   #1
Recycles dryer sheets
 
Join Date: Apr 2006
Location: Cleveland
Posts: 92
Market Linked CDs

Please spare me lecture on annuitites; I have two and they are a done deal. One comes due next May and I was told by an adviser that the only vehicle I should consider for investing that money is a Market Linked CD. I never heard of these before. Any ideas about that?
__________________

__________________
Josh
OHjosh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-18-2018, 07:15 AM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: No Country for Old Men
Posts: 45,896
Google found this: https://www.investopedia.com/article...linked-cds.asp

Quote:
According to the Wall Street Journal, after fees, limits and other factors come into play, market-linked CDs often underperform conventional CDs. The newspaper analyzed 147 market-linked CDs issued since 2010 and discovered that 62% of those products underperformed conventional CDs. Furthermore, roughly a quarter of them paid no return at all.
Like many commissioned financial products, the only party to the transaction guaranteed to make money is the seller.
__________________

__________________
Numbers is hard

Charter resident of the lumpen slums of cyberspace

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-18-2018, 07:59 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Mar 2012
Posts: 1,232
If you are interested in market linked CDs, TIPS treasury securities would be a comparable alternative with no fees. There are also ETFs for TIPS securities if you don't want to purchase the TIPS directly...though ETFs do have fees/expenses built in.

https://www.treasurydirect.gov/insti.../tips/tips.htm

Top 14 TIPS ETFs
njhowie is offline   Reply With Quote
Old 04-18-2018, 11:07 AM   #4
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 3,971
Run. Find another advisor who is a fiduciary.

The more complicated the financial product the more likely that it has been designed to make money for the seller, not for you. (From your post I think you have already learned this rule via your annuity purchases. Never forget it.)

Re @njhowie, you can also buy TIPS through Schwab, Vanguard, et al for low- or no-fees. This eliminates the hassle of setting up an account at TreasuryDirect, transferring money, etc.
OldShooter is offline   Reply With Quote
Old 04-18-2018, 12:08 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 24,300
A market linked CD is akin to an equity indexed annuity... I wouldn't buy either one.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...target 65/35/0 AA
pb4uski is offline   Reply With Quote
Old 04-18-2018, 12:54 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 4,647
We had this question come up a short while ago. There was not a lot of discussion (unusual for this board). I was offered one years ago and it felt too gimmicky to me. Wells Fargo was the issuer I think. The returns were too low unless the market went up and too many games on how they measure the market to credit the CD.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 04-18-2018, 03:54 PM   #7
Full time employment: Posting here.
 
Join Date: Dec 2006
Posts: 633
Quote:
Originally Posted by OldShooter View Post
Run. Find another advisor who is a fiduciary.

The more complicated the financial product the more likely that it has been designed to make money for the seller, not for you. (From your post I think you have already learned this rule via your annuity purchases. Never forget it.)

Re @njhowie, you can also buy TIPS through Schwab, Vanguard, et al for low- or no-fees. This eliminates the hassle of setting up an account at TreasuryDirect, transferring money, etc.
+1
__________________

wolf is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Market-linked CDs Badger FIRE and Money 11 03-09-2018 12:55 PM
Market-Linked CDs wyecrabber1 FIRE and Money 10 02-28-2016 07:33 AM
market-linked CDs, anyone? norisk FIRE and Money 1 05-05-2010 05:15 PM

» Quick Links

 
All times are GMT -6. The time now is 01:50 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.