So I got this email from a "wealth advisory firm"...

It isn't a gimmick, but the "no management fees" got me. There are quite a few clues in there. .
The return isn't guaranteed but the risk is capped. The method isn't that difficult to figure out.

Why let them do it for you when you can do it for yourself?
 
Thor said:
It isn't a gimmick, but the "no management fees" got me. There are quite a few clues in there. .
The return isn't guaranteed but the risk is capped. The method isn't that difficult to figure out.

Why let them do it for you when you can do it for yourself?
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The whole "It also provides for 125% of the stock market gains over the next 5 years." part implies the return is guaranteed. There isn't a combination of traded options/stock/futures that can provide that and no downside unless the market falls more than 40%. You'd need to buy a put spread that covered the 40% drop over 5 years, which is almost the same as just buying an ATM put and very expensive. Then buy a call spread to 125% of the market, also very expensive. The market would have to go up 50% or more just to break even on that.
 
Sig said:
The whole "It also provides for 125% of the stock market gains over the next 5 years." part implies the return is guaranteed. There isn't a combination of traded options/stock/futures that can provide that and no downside unless the market falls more than 40%. You'd need to buy a put spread that covered the 40% drop over 5 years, which is almost the same as just buying an ATM put and very expensive. Then buy a call spread to 125% of the market, also very expensive. The market would have to go up 50% or more just to break even on that.
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It can be done with a combination of options which need to be rolled over every year.

Still doesn't explain the "no management fees". Then what is he getting out of it?
 
Thor said:
It can be done with a combination of options which need to be rolled over every year.

Still doesn't explain the "no management fees". Then what is he getting out of it?
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How? You don't "roll over" an option. You pay for it and the time value of what you paid goes to zero at the point it expires and you pay for it again with a new option. There's no way you can eat that loss of time value over and over and not lose huge amounts of money. If that wasn't the case then you'd be a billionaire.
 
Saltynuts said:
Here is the bulk of it:

I wanted to share something you are not aware of and that is not being presented to you.

  • The #1 strategy I am using for clients provides for no income tax due for 5 years and is taxed at a capital gains tax rate at the end of 5 years.
  • It protects your investments from a market correction up to -40%.
  • It also provides for 125% of the stock market gains over the next 5 years.
  • No cost or management fees.
The strategy is simple and is not being shared with you. Would it be out of the question for you and I to visit 10 minutes by phone to share this strategy and keep you up to date on the very best options available to you?


I'm sure it is some kind of gimmick, but any idea if there is a particular product he is talking about?
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Why don't you and him (I assume it's a him) visit 10 minutes by phone to find out more? He's not going to come out of the phone to point a gun at your head to force you to give him the money. You will know the strategy for sure and it will save us all the speculation and guesswork. And if it's really a scam, you will have something concrete to report to the authorities.

Have fun and keep us posted!
 
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No management fee probably means it's baked into the structrued product so you'll never know how much it is, which is just the way the seller likes it...

My bet it would be around 10% and that's of course risk free for the seller regardless of what the products return will be, which again I'd assume won't be nearly as much as you think, or the product makes you think.
 
JSOP said:
Why don't you and him (I assume it's a him) visit 10 minutes by phone to find out more? He's not going to come out of the phone to point a gun at your head to force you to give him the money. You will know the strategy for sure and it will save us all the speculation and guesswork. And if it's really a scam, you will have something concrete to report to the authorities.

Have fun and keep us posted!
More...
Just so long as they don't wind up being interviewed for a future American Greed episode! :)
 
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