Investment opportunities: ripe or foolish?

[DanMa1156]

It has been a while since I've shopped around for CD's, I think the current one I have was locked in at about 4.5%

Buying Mutual funds now, probably a great Idea, because, yes, the only way they can really go is up.

But something that I failed to mention but others thankfully have is an IRA, which now I see you've picked up on. Kudos!

hope the rest of your investments go well!

Thanks! Yeah, back when I first took my loan, it was clear that the the markets were going to get worse before they got better, so I quickly dumped 25,000 of the 30,000 into a 4% CD I found that actually ends in April. I put the other $5000 into a 3 month CD that I got at 2.something % and I could max out 2008's IRA contribution before tax season. For the most part, I'd say things have gone according to plan, though the markets haven't really shown too many bright signs of recovery... We'll see though.

 

[DanMa1156]

And again, I'd like to reiterate that I appreciate everyone's advice.

 

[RHPF]

It has been a while since I've shopped around for CD's, I think the current one I have was locked in at about 4.5%

FWIW - 4.5% =/= 1.75%

I understand the 'SAFE' (sic) concept. A regular savings account is not far from 1.75 (online accounts). I would not recommend choosing any one specific investment plan, I would balance some money b/w liquid, long term, and potentially short term depending on your personal situation. I am pretty much willing to bet with current rates, ANYONE would be willing to take a 4.5% CD at the moment.

 

[DanMa1156]

FWIW - 4.5% =/= 1.75%

I understand the 'SAFE' (sic) concept. A regular savings account is not far from 1.75 (online accounts). I would not recommend choosing any one specific investment plan, I would balance some money b/w liquid, long term, and potentially short term depending on your personal situation. I am pretty much willing to bet with current rates, ANYONE would be willing to take a 4.5% CD at the moment.

Agreed. My roomate and I researched where to throw our loans at the time of the financial crisis and back in October the best we could find was 4%... 4.5 right now would be awesome.

 

[The Chief]

I think A4's is on to something there. Not being a pilot, old M/C probably in the same boat, so to speak.

Will tell you what I know. But there are so many things we do not know, or even know that we do not know. So there .....

Back in late summer, with the handwritting on the wall that we were going to have a far left POTUS, two houses of Congress far left, I dumped almost all my equity holdings, retaining only those with a good track records of dividends, my measure was at least 6% yeild. That saved me a bunch, but I am still down 25% on my residual holdings. No good, take a long time to re-coup that.

Citigroup you say? Well, today down 38%, with 1.4 Bln billion shares changing hands. The average order being 1.5 million shares. Now, question, is that the Governments hand in there buying? We do not know do we, ergo since we do not know, I would not touch it, yet.

Most "informed" folk I talk to are predicting a S&P of 500 by September. This is disaster for the equity markets. I remember a few years ago (10)same said "informed" folks were predicting a S&P of 5,000 by 2004. There are some winners out there, few and far between. Yep, I like gold, now.

Same set of folks predicting inflation of 10% or better by years end, some say 20% taking us back to the James Earl Carter days. With that set of data, the last thing you want is to be holding a CD at 4.25% (current NFCU offering)for six or seven years. There are some good yelds out there, for six or 12 months, last time I checked UBS was offering 6% for 1 year.

So back to your question - is it time to buy? Well I have exactly the same question for another direction - Is it time to sell what I have left before diaster?

Times have changed - we are in uncharted territory.

 

[Godspeed]

What? no. The CD is not supposed to be a short term high pay investment. It's supposed to be a long term SAFE investment because it is assured and insured.

/rant

Dude, a CD with a 1-3% interest rate isn't an 'investment' at all, because it pays off virtually NO return whatsoever. Why would you tie your money up in a CD (even if they allowed you to withdraw your money with no penalty) when you can achieve the same interest rate by simply dumping the money into a savings account that has 100% liquidity. Makes ZERO sense whatsoever.

Put down the bong broseph.

A CD in the 'old' days was an investment, because they paid a much more reasonable return (4-7% ish from what I remember 5+ years ago).

 

[Picaroon]

Why would you tie your money up in a CD (even if they allowed you to withdraw your money with no penalty) when you can achieve the same interest rate by simply dumping the money into a savings account that has 100% liquidity. Makes ZERO sense whatsoever.

Because you can't get the same returns on savings accounts that you can on CDs. And no, I wouldn't put money into a 5-year or even multiple year CD now because interest could go up. But if you've got cash lying around and don't want to risk it, putting it in a 6-month or 1-year CD gets you better returns than putting it in savings.

 

[GO_AV8_DevilDog]

Dude, a CD with a 1-3% interest rate isn't an 'investment' at all, because it pays off virtually NO return whatsoever. Why would you tie your money up in a CD (even if they allowed you to withdraw your money with no penalty) when you can achieve the same interest rate by simply dumping the money into a savings account that has 100% liquidity. Makes ZERO sense whatsoever.

Put down the bong broseph.

A CD in the 'old' days was an investment, because they paid a much more reasonable return (4-7% ish from what I remember 5+ years ago).

Because a CD with a 1% interest rate is still better than MOST savings accounts, The one I have currently with 4.5% is currently keeping me very happy. Now to address the concerns with inflation. Sure it doesn't keep up, but I'll take even .05% as to 00%. Face it our economy sucks, and if you want to invest well, unless you go high risk you're returns aren't going to be what they used to be. Perspective: my low risk mutual funds TANKED. My CD's? sure they weren't even close to the return that those mutual funds got in their prime, but the fact is a CD is safe and you are guaranteed to get more cash out than you put in. PERIOD.

Im not saying that a CD will make you an overnight millionaire, or even a millionaire in 5 years (if i knew how to do that I'd be doing it) but Im advocating a reasonable means to make a decent amount of interest compared to savings rates.

And (here comes the part where I blatently try to cover my ass), I believe I said to DIVERSIFY in my first post. Yes, while you can liquidate a CD, there are easier things to do. But unless something really bad happens, I doubt you'll need more than 5k in a savings account for emergencies.

and I'll keep my bong when it comes to whatever it is you're do'n


:icon_wink

 

[Godspeed]

Because a CD with a 1% interest rate is still better than MOST savings accounts........

ANDDDDD back to me. I just checked my USAA savings account (available to the military folks you're giving this advice too)... And the rate is???

1.01% YES FOLKS! It is true that the smarter place to put your money is.... That's right! Your savings account!!

I love being right..... Now everyone, Allow me to bask in my newfound rep points....

 

[GO_AV8_DevilDog]

ANDDDDD back to me. I just checked my USAA savings account (available to the military folks you're giving this advice too)... And the rate is???

1.01% YES FOLKS! It is true that the smarter place to put your money is.... That's right! Your savings account!!

I love being right..... Now everyone, Allow me to bask in my newfound rep points....

sorry to burst your bubble, but I too am wise in the way of the google ninja
https://www.usaa.com/inet/ent_utils...tes&SearchRanking=1&SearchLinkPhrase=CD rates

 

[The Chief]

.... Im not saying that a CD will make you an overnight millionaire, or even a millionaire in 5 years .... :icon_wink

Well now, lets have a history lesson, at least one example:

If ten years ago you would have put $300,000 in a CD, prevailing rates averaged over ten years. you would now have about $550,000; the miracle of compound interest at work.

Now take that same $300,000, invested in a basket of S&P stocks ten years ago and you would have today about $270,000, averaged based on overal yields.

That is over twice the returns for the CD over stocks.

My only point is that there is a lot of nonsense; mis-information out there about investing.

Do your homework. :sleep_125:sleep_125

 

[GO_AV8_DevilDog]

Well now, lets have a history lesson, at least one example:

If ten years ago you would have put $300,000 in a CD, prevailing rates averaged over ten years. you would now have about $550,000; the miracle of compound interest at work.

Now take that same $300,000, invested in a basket of S&P stocks ten years ago and you would have today about $270,000, averaged based on overal yields.

That is over twice the returns for the CD over stocks.

My only point is that there is a lot of nonsense; mis-information out there about investing.

Do your homework. :sleep_125:sleep_125

Trying to understand if you were agreeing with me or not...?


I will agree with you tho, you can do well investing if you are willing to look at different places and different options.

What it boils down to is the level of risk you want to accept in your portfolio.

That will ultimately decide how much of a return you get, and what you invest in.

 

[mastbump]

I prefer to put stock in canned goods, ammo, and gasoline. I keep all of my money in strategic places around the house, because everyone knows, it is good to diversify. This way, when Armageddon happens, I won't have to go to no bank to get my money.

 

[GO_AV8_DevilDog]

I prefer to put stock in canned goods, ammo, and gasoline. I keep all of my money in strategic places around the house, because everyone knows, it is good to diversify. This way, when Armageddon happens, I won't have to go to no bank to get my money.

so true! LOL

not that money will be any good once Armageddon hits.

I mean, you think a zombie will take a check? :icon_wink

 

[AJB37]

FWIW http://images.businessweek.com/ss/09/02/0226_brand_name_under/1.htm