Certificate Of Deposit
Investors who are nervous about the financial environment but desire to earn a minimal return on their capital will utilize these investment vehicles. In comparison to other investments like equity, bonds, and derivatives, Certificates of deposit are relatively safe. These investments are also extremely short term and they normally mature after 1 year.
Various NBA teams will follow a similar strategy when they pick up reliable players like Ray Allen or Mike Miller for 1 or 2 years. Both of these guys are lights out shooters who have had great careers. However, at this stage in their careers they are getting older so most teams don’t want to sign them to long term contracts. Instead, teams will sign them for shorter time periods to reap the gains and rewards of their experience. The Miami Heat was able to win the 2012 and 2013 NBA title because these reliable shooters were playing extremely well during the series. The Heat’s management knew exactly what they would get by giving Allen and Miller a chance; as a result, they gained a title by investing in players that were not as risky and were known for delivering value.