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My Favorite CD in This Market Bellwether
~~~ Individual Investor’s Risk Tolerance
~~~ Recap of Iran
Dear American Capitalist Reader,
Investing in the stock market has always been a risk versus reward game. The more risk you assume, the greater the expected return. The idea is to place an investor’s desire for capital preservation at one end of the scale and a desire to maximize returns at the other.
The question of risk can only be answered by each individual investor’s tolerance for volatility and loss of investment. How much money can one person lose before he or she can’t take it anymore?
Accepting the drawdown rateProfessional money managers call this the “Drawdown” test. Typically, potential clients are introduced to the money manager’s drawdown figure: the percentage an account may have lost in value at any one time. This figure can be alarming when you equate the percentage to actual dollars. For example, a 20% drawdown on a $100,000 account would mean the value had dropped as low as $80,000. Ouch!
Today, drawdown rates are running as high as 35% for some active traders. And, for hedge fund managers, drawdowns are hitting 50%. Investing in the equity markets has always been about risk. Large-cap stocks are stereotyped as conservative, low-risk plays, as small-caps are viewed as high-risk ventures with the potential for incredible gains. However, due to intense volatility and uncertainty, investing in equities isn’t for everyone.
Low-risk, above-average returnsInvestors are faced with many challenges when deciding which products to pick for their portfolios. For investors with a low-risk tolerance and desire for an above-money market rate of return, it can be highly frustrating to locate an investment vehicle that satisfies these criteria.
One investment that should definitely not be overlooked is the Certificate of Deposit, better known as the CD. With help from the Fed, interest rates have quietly increased to a point where moving some money into a CD can be quite advantageous. And, when investors can’t stomach the roller-coaster action in the equity markets, CDs make perfect sense as a core holding for a portfolio.
Yields that outperform stocksConsider my favorite vehicle right now, the Everbank CD. Everbank recognized the intense market conditions currently being felt by investors and decided to put together a CD that rivals the returns of most stocks. The Everbank four-year CD is now being offered with a very attractive Annual Percentage Yield (APR) of 5.46%. Hurry fast, though, because this APR is only available until the end of June.
There is a low minimum deposit required of only $1,500 and no account fees. This is an excellent opportunity to take advantage of a stable investment that is FDIC-insured and offers a fantastic annual return. Act quickly, though, because this is a limited-time offer and you don’t want to miss out on this chance to make an investment that let’s you sleep well at night.
Don’t miss out on this sizzling CD rate special. Available for a limited time only. Visit today at EverBank to lock in its June CD special.
Sincerely,
Todd M. Schoenberger
Editor, Red Zone Network
Recap
Here’s a real kick in the pants. Just yesterday, we told you about a Sunday Washington Post article that said Iran offered to begin talks with the United States, stating, “recognize Israel and end support of Palestinian organizations.” The proposal had come with a letter of authentication and was even confirmed as genuine by American and Iranian officials.
But it was all ignored.
Also according to reports from The Jerusalem Post, “the documents detail Iran’s aims: ending
sanctions, development of nuclear technology for peaceful purposes, and a recognition of its ‘legitimate security interests.’” Iran also agreed to discuss a number of U.S. demands: full cooperation on nuclear safeguards, “decisive action” on terrorism, coordinated efforts in Iraq, cessation of “material support” for terror organizations, and accepting the 2002 Saudi solution to the Israeli-Palestinian conflict.
That was three years ago. Now, we’re in a heap of trouble, and August for the president is too long to wait for an Iranian response.
Am I missing something here?Just today, the president accused Iran of “dragging its feet on a Western incentive package,” according to the Associated Press. The mid-August timetable “seems like an awfully long time” to wait for an answer.
Worse yet, world oil prices, according to Saudi Arabia, could triple should a war break out. The Saudis have warned that any conflict over Iran could threaten the Strait of Hormuz, which most of the Middle East countries use to tap oil from. Tankers carry some 17 million barrels through there every day, according to the International Energy Agency.
As for North Korea, no one’s been paying much attention to the little guy running the country into the ground. He’s just looking for some attention. Ignore him. He’ll go away.
Top 5 U.S. Stocks
1. Pro-Fac Cooperative (PFACP:NASDAQ)
(+54.07%)
2. Syntroleum (SYNMZ:NASDAQ)
(+24.48%)
3. Macronix International (MXICY:NASDAQ)
(+13.93%)
4. Ibasis (IBAS:NASDAQ)
(+13.22%)
5. Nu Horizons Electronics (NUHC:NASDAQ)
(+11.46%)
Ibasis traded higher after its announcement to merge with Dutch group KPN, which will pay $55 a share for a majority stake in the combined company.
Nu Horizons Electronics rallied after receiving a broker upgrade from Thomas Weisel.
Top 5 Global Markets
1. India BSE
(+2.22%)
2. Mexico IPC
(+1.13%)
3. Australia ASX
(+1.11%)
4. Hungary BSE
(+0.53%)
5. Malaysia KLSE
(+0.52%)
Asian markets were quiet overnight, trading with low volume after an unimpressive business sentiment report came out of Tokyo. However, advancing markets outnumbered declining markets, and advancers gained an average of 0.68% compared to the decliners average loss of 0.33%. One factor in investors’ minds was the Bank of Japan’s imminent rate hikes, which are now expected in mid-July. Telecoms were among the region’s winners, while exporters were among the losers.
European markets traded in a narrow range with few big winners or losers. Investors are worried about the possibility of more rate hikes, both from the European Central Bank and the U.S. Federal Reserve. Retailers were among the best performers in the region. Steelmakers also continued to rally as it looks likely that Mittal will raise its bid for Arcelor.
Earnings Announcements
Bed Bath & Beyond, Darden Restaurants, FedEx Corporation, Jabil Circuit Inc, Lindsay Manufacturing, Morgan Stanley, and Xyratex Ltd are releasing earnings.
