Markets Insight
  •  3/5/2020

Skip the Headlines, Seek Perspective


When it comes to weathering market volatility, it’s important to make sure you have the tools to manage your portfolios and understand the products that can help you manage risk. What can you do to prepare and handle disruption? It all comes down to a well-constructed financial plan and the guidance to give clients confidence in that plan.

In any market environment, there’s value in:

  1. Knowing your client’s risk tolerance
  2. Understanding how risk will affect the volatility of a portfolio
  3. Hedging against volatility by diversifying with risk-managed solutions

As a financial advisor, you know that analyzing a portfolio and maintaining proper diversification over the long term takes discipline. With an entire book of business to manage, you benefit from having unique insights and analytical tools at your disposal to walk clients through the types of investments that can help meet their objectives.

That’s where SIMON can help. Ups and downs in the market are hard to predict, so SIMON’s platform provides education and analytical tools designed to help you make educated investment decisions. SIMON also gives you access to a marketplace of risk-managed investment products.

Market-Linked Growth CDs are one example of the type of product available on SIMON that can fit as a part of a holistic, diversified portfolio. In uncertain markets, investors often think first of savings accounts and traditional CDs, but did you know that Market-Linked Growth CDs can help deliver stability while providing a broader range of return scenarios? While similarly offering principal protection, they offer a variety of options to participate in market upside. As a result, Market-Linked Growth CDs may allow you to earn greater yield than what is available in more liquid cash alternatives, subject to certain risk considerations.

The flexibility available with Market-Linked Growth CDs means investors have more options to focus on their objectives. So if you’re looking for a fixed rate, savings accounts and traditional CDs might have you covered, but if you want broader market exposure with similar protection, Market-Linked Growth CDs are a great alternative. Market-Linked Growth CDs offer the flexibility to select, for example, 1x or greater upside participation, capped or uncapped at a certain level, to participate in the performance of the market at maturity, while ensuring that your principal is 100% FDIC insured.

Investing in Market-Linked Growth CDs requires a clear understanding of the various risks involved—these are buy-and-hold investments, which means that an investor must hold the product until maturity in order to receive the return of principal and any investment returns, and there is no guaranteed secondary market. Any investment returns are subject to the performance of the market, so a holder must accept the risk of forgoing guaranteed yield and being limited to only the return of principal at maturity. Taking time to understand the product features and risks of any investment option, including Market-Linked Growth CDs, is critical to building a successfully diversified and well-constructed investment portfolio.

Want to learn more? Be sure to follow us on LinkedIn. If you’re a financial advisor, contact us for a demo and if you’re an investor, ask your financial advisor about SIMON.

*Average of Bankrate’s 18 “Best Savings Accounts & Rates” as of February 29, 2020. Source: Bankrate

**Average of NerdWallet’s 15 “Best 5-Year CD Rates” as of March 2, 2020. Source: NerdWallet

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