Are you like other investors searching for opportunities to diversify your investment strategies? Diversification is an essential element for long-term portfolio success. There are many options available. Structured notes may be an option to consider adding to your portfolio.
Structured notes are a type of investment that combines bonds and derivatives. They are created by banks and work by linking a bond to an underlying asset, like stocks or indexes. A structured note can be created for a multitude of purposes, such as income generation or growth, and can have different downside protection features. Some structured products such as market-linked CDs are even FDIC-insured up to the applicable limit.
These investment strategies can be a very attractive product, allowing an investor to have both market participation or income, and varying degrees of downside protection. Like all investments, these products are not without risks.
Structured notes are created for many purposes. They can be used to accomplish certain goals or objectives, and can also be used to create a more sophisticated and diverse portfolio. As with all investments, make sure you fully understand what you are investing in, and never hesitate to reach out to your financial advisor to ask questions.
One factor to consider regarding these products is liquidity risk. There is virtually no secondary market for these products and they should be held to maturity if at all possible. If they need to be liquidated before maturity, it could result in a loss as the product will more than likely need to be sold at a discount. Also, unless covered by the FDIC, these products are subject to the creditworthiness of the issuing institution.
If you have more questions or would like to learn more about structured notes, other products, or creating a diverse investment portfolio, feel free to reach out to us here at Good Life Asset Strategies.
The views expressed represent the opinion of Good Life Asset Strategies, LLC. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness.
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