Marketing Corner – The Effects of Black Monday Are Still With Us.
Marketing Corner – Thursday October 20th, 2016
The Effects of Black Monday Are Still With Us
October 19th, 1987. A day in which the Dow Jones Industrial Average dropped a staggering 508 points, representing a record percentage loss (a record that still stands today). A day preceded by mini-crashes and an all-time high just two months prior. A day that is known as Black Monday.
Yesterday was the 29th anniversary of the Black Monday crash. While there are many factors that led to this event, the effects of Black Monday still linger, even with the economic volatility we’ve experienced in the intervening 29 years.
As markets tanked in 1987, consumers pulled out of exposed investments and transferred their money into Certificates of Deposits.
Hence October and April are now CD replacement months, with six-month and twelve-month CDs up for renewal. For some consumers, CDs can seem like a great option for their money—certainly they did in 1987. With guaranteed interest rates and FDIC backing, CDs seem like a relatively sturdy ship to navigate the sometimes choppy waters of the market.
However, because of their low interest rates, CDs do not hedge against inflation well, when compared to other products, like certain annuities. This is especially true with long-range CDs that many consumers automatically renew out of habit. This means that some consumers may be losing real-world value that could be parlayed into another solution that works better against inflation and could provide lifetime income.
Obviously every consumer presents a different situation. For some, CDs may track well with their needs. Others may not even be aware that there are other options. However, what this means is that April and October are good opportunities for review, discussion, and product sales.
To help advisors and agents take advantage of CD replacement opportunities, Legacy Financial Partners has prepared an exclusive sales kit that includes:
• Taxable Equivalent Yield Chart
• CD vs. Annuity Comparison Chart
• Split Annuity CD Beater Strategy
• CD vs. FIA Sales Strategy
• CD Prospecting Letter
• Customizable Fact Finder
• Retirement Pitfalls Presentation
• Going Broke Safely Presentation
Complimentary 2016 CD Replacement Kit
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your complimentary copy.