“The Secret ‘Mutual Fund’ that NEVER GOES DOWN”

By Travis Johnson, Stock Gumshoe, January 30, 2012

Steve Sjuggerud is teasing us with something genuinely compelling as he urges us to subscribe to his True Wealth newsletter: investments that NEVER go down.

Really?

Yep, his pitch is that he has three kinds of investments that, if taken together, can be considered to be a “mutual fund” that never goes down. They’re not actually a mutual fund, of course, that would be too easy — but apparently they provide some sort of diversification and, most importantly, they protect against loss of principal.

Anyone who has lived through the last four years in the stock market will instantly light up a little bit at that “never goes down” part — which is, of course, why the copywriter put that in the headline. And then followed up with this jabber that makes it seem even better:

“There are no fees… no marketing department… and no salesmen or brokers.

“But the three assets that make up this unique “fund” have beaten the stock market by as much as 165% over the past decade, and are among the only investments in the world that are guaranteed to never go down….

“What I discovered over the past few years is incredible—3 assets with great upside potential, which come with a contractual guarantee that they will never lose a penny in value.

“You can buy just one of these investments… or you can buy all three, and you will own what is essentially a “mutual fund” that can NEVER go down.

“What’s remarkable about this situation to me is that you are very unlikely to see any of these opportunities advertised to the general public.

“And of course, this ‘fund’ is not listed on any stock market—nor are any of the assets it contains. There’s no prospectus report. There’s basically no advertising or marketing.

“In fact, this is something you are unlikely to hear about or read about anywhere else, as far as I know.”

So what is he really talking about?

Well, he teases three investments that “never go down” — the first one he calls the “Royal Currency” and implies that Warren Buffett and Bill Gross personally use it in their own accounts. It apparently goes back almost 200 years to Great Britain, and involves some sort of government guarantee.

Here’s an excerpt of the clues for that one:

“On a research trip to London a few years back, I found a government-issued asset that has been secretly used by some of the wealthiest families in American history (like the DuPonts, Roosevelts, and Lillys), to safely build and protect wealth….

“This asset has nothing to with stocks, bonds, gold, silver, coins, commodities or any other investment asset you’ve likely heard of before. Over the past decade, I have seen it written about just once in the mainstream press, in an April 2010 edition of The Wall Street Journal.

“Some experts call this mysterious investment ‘The Royal Currency,’ because it was first issued by the Royal British Government almost 200 years ago, and has actually been used as money in many places around the world.

“But this unique investment, as it is used today, is not an actual currency. And while the British were the first to issue the Royal Currency, today almost every government in the world has its own profitable version.”

And apparently the returns have been dramatic, particularly during times of inflation:

“In fact, during the 1970s, many Royal Currency investments went up by as much as 1,000%. I’m sure I don’t have to tell you that with all the money printing our government has been doing, we’re very likely to have very high inflation in the years to come.

And even in non-inflationary times, the government-created Royal Currency does extremely well. A different index created by a private firm shows that this unique investment has gained 209% since 1998.”

There is at least one little disconnect here — apparently there is the government-related “royal currency” out there, but the way to get it with the “never goes down” guarantee is privately sold …

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“You can make an investment in the Royal Currency that is guaranteed to Never Go Down….

“I have located the best Royal Currency broker in the world. They have been in business since – get this – 1856. That’s more than 150 years….

… when you make a Royal Currency investment with this brokerage, you will receive a written contract that guarantees you cannot lose money over the next five years. In other words, the worst you can do is break even. I believe you could double your money, easily – you could possibly make 250% or more. Remember, during the 1970s, this investment went up about 1,000%. ”

Which, frankly, has the Thinkolator stumped — it’s been churning and smoking over there in the corner for a good half hour, and nothing definitive is leaking out into the results bin.

So we’re left to speculate — my guess? Well, I can’t give you promises of accuracy here like I usually try to do (I generally don’t reveal a stock as a teaser solution unless I’m 99% sure it’s a match — and more typically we’re 100% certain), but here’s what I think:

For the broker that’s been around since 1856, we have a couple choices but the logical guess is Credit-Suisse, which is the only big investment bank that I know of that was founded in that year. As to the investment? Again, I don’t really know on this one — but it sounds a lot like the various market-indexed certificates of deposit that are available. And there was an article in an April, 2010 issue of the Wall Street Journal that talked up these products, though they’ve also been covered in previous articles in that paper (they were pretty popular when the market was crashing and folks were looking for downside protection in 2008 and 2009).

Here’s that article on market-li