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Forget market-linked CDs, she said.
They make absolutely no sense.
You want to invest in the market?Invest in the market.
You want a CD?
Do not combine the two.
What Is a Market-Linked CD?
The CD will do well when the market does well, but the opposite is also true.
This CD tracked the S&P 500 and returned just 61% of the indexs increases.
There are other downsides as well.
Also, returns on a market-linked CD are unknown until the maturity date and are exposed to market volatility.
Although the market-linked CD is linked to the market, returns are considered interest.
The bottom line is that market-linked CDs can offer diversification and convenience.
However, Orman recommends investing in the stock market or standard CDs instead.
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