• Products
  • Insights
  • Practice Management
  • Resources
  • About Us

Fear of market volatility can make seemingly safe investments appear alluring. The downside of playing it safe, however, is that you may actually be losing purchasing power by putting your money in investments that don’t keep pace with inflation.

For example, when the Ford Mustang launched in 1964, the cost of a '64 standard coupe was $2,368. Back then, $100,000 invested in a 6-month CD would have provided you with $4,300 in annualized income—almost enough to buy two Ford Mustangs!

Unfortunately, the income on the same $100,000 CD today would only provide you with enough income to pay for an exhaust system and engine cooling kit for your cherished Ford Mustang. The speed of a Mustang is apparently no match for the speed of inflation!

 

The Effects of Inflation: $100,000 6-Month CD Investment

 
Year 6-Month CD Rate1 Annualized CD Income MSRP Ford Mustang2 Your CD Income Could Buy...
1964 4.30% $4,300 $2,368 Almost 2 Ford Mustangs
($4,300)Mustang Cars
1984 8.85% $8,850 $7,098 1 Ford Mustang plus 101
full gas tank refills3
($8,850)Mustang Car Side View
2004 2.66% $2,660 $18,150 A top end engine kit for
your Ford Mustang
($2,660)4Mustang Car Engine
2024 5.25% $5,250 $30,920 An exhaust system
and engine cooling
kit for your Mustang
($5,164)4Exhaust System and Engine Cooling Lit for your Mustang

CDs are insured by the FDIC, offer a fixed rate of return, and are generally designed for short-term savings needs. The principal value and investment return of investment securities (including mutual funds) are subject to risk, will fluctuate with changes in market conditions, are generally considered long-term investments, and may not be in the best interest of all investors.

Talk to your financial professional today about investments with the potential to outpace inflation.

 

1 Data Sources: Federal Reserve, Bankrate, and Hartford Funds, 2/24. Rates for previous years are the average CD rate; the CD rate for 2024 is an average of the highest available 6-month CD rate on Bankrate.com as of January 2024.

2 Sources: CJ Pony Parts and Ford, 2/24.

3 Data Sources: Energy.gov and 1A Auto, 2/24.

4 Data Source: CJ Pony Parts, 2/24.

CCWP012 3388867
Related Content

Client Conversations
Is a Separately Managed Account Right for You?
For some investors, investing in a separately managed account may have advantages over investing in mutual funds or ETFs.
Servicing Clients
HSAs: 1 Account, 3 Tax Benefits
Are you missing out on the significant benefits of a health savings account?
10 Things You Should Know About series
10 Things You Should Know About RMDs
Taking required minimum distributions from your retirement savings can be tricky. We can help.
10 Things You Should Know About series
10 Things Veterans and Servicemembers Should Know About Their Benefits
Serving your country entitles you and your family to some bespoke financial benefits.
Investing for Growth
The Cyclical Nature of Growth vs. Value Investing
Each style has had its ups and downs over the years, so investing in both styles could be prudent.
10 Things You Should Know About series
10 Things Veterans and Servicemembers Should Know About Social Security
Veterans and their families make up almost 40% of the adult Social Security beneficiary population. Here’s what you should know about your benefits and eligibility.