It’s Time to Consider Structured Notes for a Portion of Your Portfolio

Trying to generate income while limiting risk in today’s low-interest rate environment is beyond tough. One possibility I’m recommending to my clients is structured notes.

A red change purse.
(Image credit: Getty Images)

When we build portfolios for our clients, we strive to make complex investment concepts easy to understand. Often, we reference a “Three Bucket” approach to asset allocation.

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Structured products must be reviewed carefully to understand the terms of the risks associated with the specific Structured Product offered, including that they may not pay interest prior to liquidation and may be structured to pay distributions only at maturity. As with many similar investments, the rate of return is based on the performance of the underlying assets held in the portfolio or the underlying index or underlying commodity backing the Structured Product. If the Structured Product is not designated as being 100% principal protected, FDIC insured or deemed as market-protected, some of your principal may be at risk and the return of principal is only guaranteed to the degree specified in the contract. This may include receiving less than the principal amount of the investment and could result in the loss of your initial investment.


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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Mike Haffling, Investment Adviser Representative
President and Founder, Verus Capital Management

Mike Haffling is president and founder of Verus Capital Management in Chicago. Mike is an Investment Adviser Representative and insurance professional. He has always worked as an independent financial adviser, serving his clients with a comprehensive approach to retirement planning for more than a decade.