A Shining Investment

A year ago, I wrote about an investment that's good as gold.

Now I'm writing an update because this is your last chance to participate in the MarketSafe Gold Bullion certificate of deposit sold by online bank Everbank.

It's an FDIC-insured, five-year CD with an interest return that's tied to the price of gold. You're guaranteed not to lose money: If the price of gold drops over that five-year period, you'll get your initial investment back but simply will earn no interest.

This product is not, strictly speaking, a traditional certificate of deposit, although it does carry FDIC insurance. Instead of interest, you get a "market upside payment" which is determined by the price of gold on ten specific, semi-annual dates during the five-year term of the CD.

At the end of the five-year term, the amount of your market upside payment equals the difference between the average price of gold on those ten dates, compared to the price of gold when you purchased the CD.

At the time I wrote the column a little over a year ago, gold was trading at about $470 an ounce, and the initial "reference point" of the CD was $472.25. Since then, gold bullion has traded at over $600 an ounce. In fact, the first two semiannual "observation points" for the Oct. 25, 2005 CD were $624.75 in April and $580.75 in October. That makes the average gold price to date $602.75 -- or 27% over the reference price. That's not a bad one-year performance!