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Commodities – Fill The Gap In Your Portfolio

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I have only my father to blame.

He was the one who introduced me to stocks, mutual funds and investing at a very young age. In fact, he was once interviewed for a newspaper article on parenting, and he admitted that he used to read to me from The Wall Street Journal to put me down for my afternoon nap when I was a baby.

By elementary school, I was learning about investing for retirement and the power of compounding.


High school brought lessons on the GDP, CPI and corporate earnings reports.

Shortly after college, I decided to introduce him to the world of options trading, while he was attempting to convert me to the futures market. And while trading futures didn’t fit my own risk profile, he was right when he explained that I was missing out on a huge opportunity to diversify my portfolio…

When it comes to investing in the market as a way of growing wealth, most people are first introduced to stocks. They are among the easiest to comprehend and trade. When you buy a stock and the price rises, you make money. When you buy a stock and the price goes down, you lose money.

But you need only to pull up a market-focused news website and a quick skim reveals that there’s far more available for investing than just stocks.

Commodities — such as oil, gold, sugar, coffee, timber and much more — offer an avenue for investing that can offer great profits if you’re right about the direction and timing.

In fact, the Dow Jones Commodity Index has surged more than 34% since hitting a low in January 2016, outpacing the performance of the S&P 500 Index over the same period.

However, if you want to directly play many commodities, it means that you need to learn how to play the futures market. Futures are a contract that oblige the buyer to purchase a specific quantity of an asset. Futures can be very fast-moving, creating and destroying fortunes in a short time frame.

That leaves many investors at a crossroads: They can jump into the futures market to take advantage of opportunities within various commodities, or they can take a less direct route to investing in commodities through an exchange-traded fund or possibly even a company in that field (such as an oil driller or a gold mining company).

But there is a new option that will allow you to gain exposure to some key movers within the commodity market, while sharply reducing your risk.

A New Way to Play Commodities

Our friends at EverBank have created the 5-year MarketSafe® Core Commodities CD. With this CD, you have zero risk to your deposited principal, and you receive automatic exposure to the potential gains in four important commodities:

  • Gold.
  • Sugar.
  • Copper.
  • WTI oil.

This indexed, U.S. dollar-denominated CD pays no periodic rate of interest or annual percentage yield. But it comes with a potential market upside payment based on the equally-weighted performance across semiannual pricing dates of the four component commodities.

Here’s how it works: Every six months, EverBank calculates the interim semiannual performance of each commodity. At the end of the CD’s term, the bank determines each commodity’s average return and calculates the final performance for the four commodities together.

If the CD’s performance is greater than 0% at maturity … that’s where the market upside payment comes in.

The minimum initial deposit is $1,500, but let’s suppose you deposited a larger sum, like $10,000. If the CD’s final performance was calculated at 3%, you’d earn a market upside payment of $300. The more you deposit, the larger the potential market upside payment at maturity if the CD has a positive return.

But if the CD’s performance is equal to or less than 0%, there’s nothing to worry about. At maturity, you still receive 100% of your deposited principal from EverBank.

And, because EverBank is a member of the FDIC, deposits are FDIC-insured up to the standard maximum of $250,000.

The CD’s funding deadline was just extended to March 30, so you need to act quickly. You can find the term sheet for EverBank’s 5-year MarketSafe® Core Commodities CD here. We have a paid marketing relationship with EverBank, but you’d want to know about this product regardless as we steer our way through this historically trying period of financial and economic history.

Don’t miss this great opportunity to diversify your portfolio to include the commodity market.


Jocelynn Smith

Sr. Managing Editor, Sovereign Investor Daily

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