FDIC-Insured Structured Certificates of Deposit & Investors Reaching Their Financial Goals
Advisors Asset Management
By Dave Siebert
February 4, 2012
Are we there yet? : An investor’s question about reaching their financial goal and how FDIC-insured Structured Certificates of Deposit (CD) may play a roll.
When I was a child, we would go on epic family vacations. My family would take two weeks to drive around the country to see family. The course was one of two routes:
- New York (starting point) – Florida – Tennessee and then back to New York or
- New York – Michigan – Tennessee and then back to New York
I use to call these trips the Bermuda Triangle. At times it was quite frightening to sit in the back seat of my parents’ Dodge Aspen next to my younger brother for hours on end before the days of portable electronics to occupy time. I remember Mad Libs being a life saver at a point in the early 1980s.
A common question that would be asked of my father as he drove was:
“Are we there yet?”
His response as my brother and I only heard it once per trip:
“No. You will know when we are. Do not ask again.”
We would never ask again during that leg of the trip.
Are investors asking their financial advisors the same question? Are we there yet with regard to our financial goals? If the answer is yes, how does one stay there? If the answer is no, how does one get there?
The markets over the last few years have had volatility and thus ups and downs. Some of the movements have been quite large. FDIC-insured Structured CDs may be a topic of conversation for an investor who has crossed the finish line to their goal or as they are still working on getting to where they want or need to be.
The safety that Structured CDs provide, in terms of the return of principal when held to maturity in addition to FDIC insurance, may have the calming effect that an investor who has reached their destination is looking for while the performance of said CD linked to some underlying asset class (commodity, currency, equity or fixed-income) may be what the investor who is still traveling to their destination is seeking in order to reach said destination.
As an investor, one wants to reach their financial goal just as when I was a child on vacation, I wanted to reach the driveway of my grandparents.
(c) Advisors Asset Management
