Warren Buffett has many great investment quotes, but perhaps my favourite is “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1”. This has never been more applicable than now. The world is about to become a far more uncertain place for investors as a series of political and economic events threaten to derail the global economy.
Number one on the list of threats is the US-China Trade war. On its own, it could reduce global GDP by as much as $600 billion per year. In addition, we must worry about Brexit, the US 2020 election and the fact equity prices are very elevated. We are, internationally at least, still in a bull market. A bull market many are calling the longest in history.
Locally things are even worse with a stagnant economy, rising unemployment and load shedding on the cards for a couple more years at least.
At the same time, you can’t afford to stay in cash
Hard currency interest rates remain at historic lows and the rand continues to be among the most volatile currencies in the world. The other safe havens, bonds and property also don’t look as stable as we would like.
Especially local property as taxes rise and prices remain subdued.
It was with these factors in mind that I present my June Structured Product pick.
Here is a brief rundown of the features of the product.
1. Full capital protection plus an additional 3%, all in US Dollars,
2. Linked to US, European and Japanese markets,
3. 3.8 Year lifespan allowing you to pay a lower tax rate,
4. 2x market upside after the guarantee (capped at 34% total), and
5. A fully offshore investment structure.
Your chance to win on the ICC Cricket World Cup 2019!
Every day thousands of punters are looking for the perfect bet in sports betting! Most people think winning bets is down to blind luck.
And I get that.
But while there is an element of chance involved, the really, really great tipsters out there spend their time analysing hundreds - sometimes thousands - of pieces of data.
Then, that data is collected, collated and analysed.
It's pretty much a full time job…
And the hard work really pays off.
Take this guy for example…
He's produced winners of up to R1,240 and even a whopping R1,870.
Every Friday evening he sends his readers simple, step-by-step instructions on what bets to place.
In short, it couldn't be easier for ordinary people like you to take advantage of this.
Overall, this trends expert lands a profit in around 67% of his bets.
Today, the “Smart Money” is the safe money…
This product focuses on safety. All your capital is guaranteed plus an additional 3 percent. This is roughly the return you would get If you put your money in a US Dollar bank account. Best of all there are no conditions on this protection. As you may know some products lose their protection if the market fall too far. This product is protected all the way down.
Of course, nothing in this life is for free. For this stellar protection, you are giving up some of the potential upside. If we see very strong markets global markets for the next 3.8 years, you will be better served by being invested directly.
That said, the cap of 34% in USD over 3.8 years translates to a compounding return of 8% per year. That’s pretty much the average historical return of the S&P 500. In addition, you will get this 34% if the indices are up just 18,5%. Essentially you are exchanging any upside above 34% for total protection on the downside.
A word of caution, the availability on this particular structure is very, very limited. Due to the popularity of the product, there is currently less than R100 million capacity available and while that may seem like a lot, it is likely to run our very quickly.
Unfortunately, I am restricted in my ability to name the product in open media forums such as social media or this MoneyMorning newsletter. But I do believe this structure is an excellent option for those looking to protect funds but still generate decent returns in uncertain markets.
If you give the 5 product features mentioned above to any decent financial advisor, they will likely know exactly what I’m talking about. It is only available through financial advisors and the bank backing the product is not selling direct to the public due to low capacity.
Of course, if you would like more information, I can share it with you directly on a one-on-one basis. For more information please contact email@example.com
or call us directly on +27 11 781 4454 and let us know you are a Fleet Street subscriber.