Date: Fri, 18 Feb 2005 11:41:33 CST
From: terrapin_62@yahoo.com
Newsgroups: misc.invest.financial-plan
Subject: Re: Merrill Lynch Market Participation Deposits based upon the S&P 500 Index...
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JFOREMAN10@houston.rr.com wrote:
> My advisor is reccommending  market participation deposits.
Supposedly to
> achieve the return of the S&P 500 Index with no downside potential.
I am
> just wondering what the catch is.  I read the prospectus
> (http://eln.ml.com/docs/MPDs/February/FebAvgPrelim.pdf) but it is
rather
> confusing.
>
>
> Thanks in advance,

I suppose your advisor will sell you on the fact that you're guaranteed
to receive at least your original investment after the deposits mature
(10 years).  That isn't worth as much as it may sound.  I doubt your
advisor will stress that you won't receive the S&P500 dividend yield
(nearly 2%), which is borderline criminal.

Packaging a product like this with a very confusing prospectus and
selling it to unsuspecting clients is sleazy. I'd say that it, despite
coming from an established, well-known firm like Merril Lynch, is
nothing less than a scam.