Morton Fox (mortonfox) wrote,
Morton Fox
mortonfox

Food Blog II

I had some coupons from the Sunday paper, so I went to Popeye's Chicken and got 20 pieces of chicken. Well, that takes care of dinner for the whole week!

Maybe I can have chicken for breakfast too.

An item I found: Dog bowl novelty cookies and candy. I got it at a Wawa store the previous weekend.





Recently, a number of newsletters have been carrying ads for the EverBank MarketSafe Gold Bullion CD. The CD's return depends on the increase in price of Gold, based on the averaging the Spot Price of Gold on 10 semiannual Pricing Dates over the next 5 years. Or, if that turns out to be negative, you get back your principal.

Sounds good, but there are a few reasons why I think it may not be the best way to go:

1. In this kind of economic environment with major changes afoot, 5 years is a long time to tie up your money.

2. If you believe that gold is in a strong bull market, the CD will not capture all of the upside potential of gold. Since the return is an average over 5 years, you'll get about half of the return, maybe more or maybe less depending on the shape of the curve. Their hypothetical returns chart shows that clearly. If you compare the 4th and 5th columns, there were quite a number of 5-year periods in the 70s when this CD would've been left in the dust vs. holding gold bullion.

3. If gold goes down and stays down, the return of principal actually represents a significant opportunity cost. Consider that Commerce Bank, a bank in my area that doesn't even have the best rates, offers a 5-year CD at 3.75% APY. For the 5-year period, that would be around 20.2%. So a mere return of principal would be behind by that much compared to a regular CD.

4. Didn't John Titor say something about a Civil War?

Even so, I think the Gold CD is a reasonable way for a newcomer to get his foot in the gold market. However, anyone with the know-how may be better off trading gold bullion or gold ETFs.
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