#16
|
||||
|
||||
Quote:
I started a CD at my local credit union back in March when I saw the rate went over 1% - nobody knew at the time the rates would go up so quick. I went in last Friday and paid the penalty to close it and re-open at 2.8, and it made a very considerable difference in the total interest over the 3 years!
__________________
"One small heart, and a great big soul that's driving" |
#17
|
|||
|
|||
Quote:
I too have been closing out CD’s with low rates (especially ones that were opened or rolled over since the start of the pandemic), paying the penalties, and reinvesting in higher yielding options. The rate on a Money Market account at Capital One is better than 2%. Meanwhile, the rate on my Bank of America savings account is, I think, .04%. Hard to make sense of such discrepancies…. With so much uncertainty about the world and the global economy (which very much effects what happens with the US economy, perhaps more than any other time we have seen), laddered CD’s are a good place to have a portion of one’s investments. How much has a lot to do with individual variables and risk tolerance. |
#18
|
|||
|
|||
Looking at the S&P 500 from 2002 to 2021, the average stock market return for the last 20 years was 8.91% (6.40% when adjusted for inflation) and for the last 30 years was 9.89% (7.31% when adjusted for inflation).
Stock market fluctuations can be tolerated when you consider the average returns. Compare the returns provided by bonds/money market/CDs. I retired in 2014 and changed IRA investment mix from 80% stocks/20% bonds to 98% stocks. Returns through 2021 were 85%. I’m 70 years old but my investment horizon is 30+ years. How can that be? I have enough assets (and low aversion to balance fluctuation) to tolerate the 23% drop that’s happening now in 2022. The investment horizon is now that of our sons who are 41 and 36 years old. General recommendations for asset mix vs. age are only that. Adjust the mix for your own situation and current stock/bond returns. |
#19
|
||||
|
||||
I guess my gut is telling me that we are currently in uncharted waters - those who say "it will come back, it always does" are hopeful, of course, but I feel like that isn't as chiseled in stone as it once was.
__________________
"One small heart, and a great big soul that's driving" |
#20
|
|||
|
|||
|
#21
|
||||
|
||||
Quote:
__________________
Martin 0-16NY Emerald Amicus Emerald X20 Cordoba Stage Some of my tunes: https://youtube.com/user/eatswodo |
#22
|
|||
|
|||
Obviously, depending on your financial situation, 10K can be a lot to invest or not so much. The 9.62% is attractive for a short term investment, especially if you have that amount in cash in a savings account paying .5 to 1.5% or some such.
If you are comfortable tying up that much for a year, go for it. The 10K maximum per person is doable for us, but in our case limiting. We have “laddered” three CD’s with one year, two year and three year maturity. The lowest rate we are receiving is on the one year at 2.28% Annual Yield. The three year is 3.11%. While that doesn’t sound like a lot, it all depends on the amount one is capable of investing and it’s a lot better than putting the same funds in a regular savings/checking account. As far as the stock market, we have withdrawn 80% of our assets from the market and placed them in a money market fund IRA. Not making much, but haven’t lost any either. At age 72, I’m not playing the game anymore…might not have the time. BTW and this is important….you don’t have to invest 10K to buy one of these bonds…$25 will get you one. Here’s the info: https://treasurydirect.gov/savings-bonds/buy-a-bond/ The internet is quite useful for research purposes
__________________
Nothing bothers me unless I let it. Martin D18 Gibson J45 Gibson J15 Fender Copperburst Telecaster Squier CV 50 Stratocaster Squier CV 50 Telecaster Last edited by rokdog49; 10-06-2022 at 06:29 AM. |
#23
|
|||
|
|||
Of course many of those that say "it will come back, it always does" are the same folks who tell you (usually in very small print) that "past performance may not indicate future returns".
|
#24
|
|||
|
|||
Todd, thanks for posting about this. I didn't know about the I bonds before your post. Definitely going to buy some next week. Thanks again, Kevin
|
#25
|
||||
|
||||
Quote:
Glad you are taking advantage!
__________________
"One small heart, and a great big soul that's driving" |
#26
|
|||
|
|||
I started buying them in 2000 for "rainy day" savings. Fortunately, I did not need the money. The bonds make a substantial part of my retirement funds. Some of the older bonds earn over 10% today.
|
#27
|
|||
|
|||
P.S.A. Capitol One is offering 3.25% annual yield on $1000 minimum CD’s.
__________________
Nothing bothers me unless I let it. Martin D18 Gibson J45 Gibson J15 Fender Copperburst Telecaster Squier CV 50 Stratocaster Squier CV 50 Telecaster |
#28
|
|||
|
|||
Better get those bonds quickly, before the rate drops on November 1:
https://www.wsj.com/livecoverage/sto...gIbQ9GlSIN3BxD |
#29
|
|||
|
|||
We've had a horrible experience with them taking over a credit card we use, but thank you for a reminder to look, shop around, and make some decisions. It has been easy to remember having a cash balance as conventional wisdom suggests, but the way the environment has been also easy to forget to shop around and do better with that.
__________________
ƃuoɹʍ llɐ ʇno əɯɐɔ ʇɐɥʇ |