a shorthistory

o f c d r e p l a c e m e n tm o n t h s

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introductionYou might know that April andOctober are CD replacementmonths. But do you know why?The history that lead to thesesales opportunities is actuallyrather interesting and showshow economic events can ripplefar ahead in time.

blackmonday

On October 19, 1987, the DowJones Industrial Average droppeda whopping negative 22.61%--theindex’s largest percentage drop. This event would become knownas Black Monday and manythought this was the precursor toanother Great Crash.

friday 13thmini-crashWhile markets rebounded, thereremained a great amount ofvolatility, with after-shocks andmini-crashes like the drop thathappened on October 13, 1989.

lingeringeffectsEven though the economy hasbeen beaten and torn since 1987(hello Great Recession of 2008!)the effects of Black Monday arestill felt today. As marketstanked in 1987, consumerspulled out of exposedinvestments and transferredtheir money into Certificates ofDeposits.

rush for certificates ofdepositHence October and April are nowCD replacement months, withsix-month and twelve-monthCDs up for renewal. For someconsumers, CDs can seem like agreat option for their money—certainly they did in 1987.With guaranteed interest ratesand FDIC backing, CDs seem likea relatively sturdy ship tonavigate the sometimes choppywaters of the market.

cdreplacementoptions

However, because of their low interestrates, CDs do not hedge against inflationwell, when compared to other products,like certain annuities. This is especiallytrue with long-range CDs that manyconsumers automatically renew out ofhabit. This means that some consumersmay be losing real-world value that couldbe parlayed into another solution thatworks better against inflation and couldprovide lifetime income.

cdreplacementmonthObviously every consumerpresents a different situation.For some, CDs may track wellwith their needs. Others may noteven be aware that there areother options. However, whatthis means is that April andOctober are good opportunitiesfor review, discussion, andproduct sales.

Legacy Financial Partners is anindependent and full service Life Insuranceand Annuity FMO that provides specificmarketing solutions to help their clientssucceed. Using dynamic tactics, anextensive support network and progressivemarketing options, Legacy FinancialPartners provides unique and specificdevelopment strategies to our businesspartners.

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