Charles Schwab??

[Anonymous]

This inquiry is the exact reason why people who manage their money statistically do worse that people who just let it sit in a retirement fund or index fund. Yes the US stock market is accompanied by high levels of risk but over a three year period the risk or volatility is not that great.

Couple this with the fact that there is STRONG negative sentiment about the US market (think about it, if you the average guy is scared to invest, think about the professionals) and bad press related to writedowns, inflation, and oil prices, I believe that this is an actually an extremely good time to invest in the US stock market through an index fund.

Now to mitigating your risk in investing in stocks. There are plenty of books that cover this suggesting derivatives, portfolio theory etc. but by far the easiest way is to use dollar cost averaging. You suspect the bottom to be any time in the next 2 years. So put your cash into an interest bearing checking account and deposit 1/24 of it into an index fund each month. That way you’ll average out somewhere close to the bottom.

Yes there is inflation risk in the dollar right now. You could short the dollar to mitigate this risk, but read any newspaper or ask anyone who follows currencies and see that Bernanke most likely is instituting a tighter monetary policy to stop inflation and is likely going to increase interest rates. It is likely that a long position with the dollar is more favorable. Remember, the most telling indicator for the future value of a currency is its present value.

Again, the general lesson I am trying to impart is to not to time the market making changes here and there to your portfolio as you hear news. When the news reaches you, it is often too late to make the changes necessary to your portfolio as the market reacts very quickly and even in response to expected news.

CDs are a safe place for your money but don’t discount mutual funds and index funds as over a longer maturity, they are historically safe.

It is easy to think that the US is encountering something entirely new and has lost its superior position in the world. This is the story the media paints but is far from true. There is strong evidence to back this up by looking at history of the US economy etc. but the most compelling evidence against the demise of the US is the entrepreneurial spirit of the law. No other country has bankruptcy law that allow one to fail many times and still find success as sam walton and many other have done. And yes everyone hates the US but there are still tons of people who want visas.

US has over 500 billionares and the next country has 50. Think about that.

[Veritas]

Brilliant summation vkailas and a useful pep talk for investors.

[Veritas]

Brilliant summation vkailas and a useful pep talk for investors.

[Veritas]

Brilliant summation vkailas and a useful pep talk for investors.

[Veritas]

Brilliant summation vkailas and a useful pep talk for investors.

[Veritas]

Brilliant summation vkailas and a useful pep talk for investors.

[lonestar2000]

AmTrust Direct 12-month CD is at 4% APY currently and is FDIC insured up to $100,000. I have not checked out what penalties there may be for early withdrawal, but it is not a brokered account so it shouldn’t be as bad as Schwab.

http://www.amtrustdirect.com/cd/pages/12months.aspx

[lonestar2000]

AmTrust Direct 12-month CD is at 4% APY currently and is FDIC insured up to $100,000. I have not checked out what penalties there may be for early withdrawal, but it is not a brokered account so it shouldn’t be as bad as Schwab.

http://www.amtrustdirect.com/cd/pages/12months.aspx

[lonestar2000]

AmTrust Direct 12-month CD is at 4% APY currently and is FDIC insured up to $100,000. I have not checked out what penalties there may be for early withdrawal, but it is not a brokered account so it shouldn’t be as bad as Schwab.

http://www.amtrustdirect.com/cd/pages/12months.aspx

[lonestar2000]

AmTrust Direct 12-month CD is at 4% APY currently and is FDIC insured up to $100,000. I have not checked out what penalties there may be for early withdrawal, but it is not a brokered account so it shouldn’t be as bad as Schwab.

http://www.amtrustdirect.com/cd/pages/12months.aspx

[lonestar2000]

AmTrust Direct 12-month CD is at 4% APY currently and is FDIC insured up to $100,000. I have not checked out what penalties there may be for early withdrawal, but it is not a brokered account so it shouldn’t be as bad as Schwab.

http://www.amtrustdirect.com/cd/pages/12months.aspx

[CA renter]

“What’s the catch on the everbank foreign CD’s? If something looks too good to be true it usually is…”
********************

I’ve had three CDs, in different currencies, with Everbank over the past year. During a time when the dollar was falling, I lost 13% with Everbank, much of it due to the Icelandic Krona, but have lost a little money in the SAR and NZD.

I’ve had better luck with the currency ETFs (FXE, FXY, etc.) because I could get in and out whenever the market was changing.

IMHO, Everbank is not a good place to park your money.

Also, I use brokered CDs because it’s easier to manage multiple CDs in a brokerage account rather than having them spread out over many institutions. Too easy to miss maturity dates & instructions, and I like knowing what we’re getting into before it happens. With bank CDs, they won’t tell you the rate when the CD matures and rolls over, until it’s already done.

A word of warning on municipal bonds…

In an inflationary environmnet with artificially low rates, it would be wise to use caution here. Also, a number of municipalities own some of the toxic paper from the housing bubble (derivatives and mortgage paper). They are underfunded, and could face possible bankruptcy in many cases — revenues are down because of lower property and sales tax receipts. Then, you have the pension issues — probably underfunded in most cases.

Best of luck to you!!!

[CA renter]

“What’s the catch on the everbank foreign CD’s? If something looks too good to be true it usually is…”
********************

I’ve had three CDs, in different currencies, with Everbank over the past year. During a time when the dollar was falling, I lost 13% with Everbank, much of it due to the Icelandic Krona, but have lost a little money in the SAR and NZD.

I’ve had better luck with the currency ETFs (FXE, FXY, etc.) because I could get in and out whenever the market was changing.

IMHO, Everbank is not a good place to park your money.

Also, I use brokered CDs because it’s easier to manage multiple CDs in a brokerage account rather than having them spread out over many institutions. Too easy to miss maturity dates & instructions, and I like knowing what we’re getting into before it happens. With bank CDs, they won’t tell you the rate when the CD matures and rolls over, until it’s already done.

A word of warning on municipal bonds…

In an inflationary environmnet with artificially low rates, it would be wise to use caution here. Also, a number of municipalities own some of the toxic paper from the housing bubble (derivatives and mortgage paper). They are underfunded, and could face possible bankruptcy in many cases — revenues are down because of lower property and sales tax receipts. Then, you have the pension issues — probably underfunded in most cases.

Best of luck to you!!!

[CA renter]

“What’s the catch on the everbank foreign CD’s? If something looks too good to be true it usually is…”
********************

I’ve had three CDs, in different currencies, with Everbank over the past year. During a time when the dollar was falling, I lost 13% with Everbank, much of it due to the Icelandic Krona, but have lost a little money in the SAR and NZD.

I’ve had better luck with the currency ETFs (FXE, FXY, etc.) because I could get in and out whenever the market was changing.

IMHO, Everbank is not a good place to park your money.

Also, I use brokered CDs because it’s easier to manage multiple CDs in a brokerage account rather than having them spread out over many institutions. Too easy to miss maturity dates & instructions, and I like knowing what we’re getting into before it happens. With bank CDs, they won’t tell you the rate when the CD matures and rolls over, until it’s already done.

A word of warning on municipal bonds…

In an inflationary environmnet with artificially low rates, it would be wise to use caution here. Also, a number of municipalities own some of the toxic paper from the housing bubble (derivatives and mortgage paper). They are underfunded, and could face possible bankruptcy in many cases — revenues are down because of lower property and sales tax receipts. Then, you have the pension issues — probably underfunded in most cases.

Best of luck to you!!!

[CA renter]

“What’s the catch on the everbank foreign CD’s? If something looks too good to be true it usually is…”
********************

I’ve had three CDs, in different currencies, with Everbank over the past year. During a time when the dollar was falling, I lost 13% with Everbank, much of it due to the Icelandic Krona, but have lost a little money in the SAR and NZD.

I’ve had better luck with the currency ETFs (FXE, FXY, etc.) because I could get in and out whenever the market was changing.

IMHO, Everbank is not a good place to park your money.

Also, I use brokered CDs because it’s easier to manage multiple CDs in a brokerage account rather than having them spread out over many institutions. Too easy to miss maturity dates & instructions, and I like knowing what we’re getting into before it happens. With bank CDs, they won’t tell you the rate when the CD matures and rolls over, until it’s already done.

A word of warning on municipal bonds…

In an inflationary environmnet with artificially low rates, it would be wise to use caution here. Also, a number of municipalities own some of the toxic paper from the housing bubble (derivatives and mortgage paper). They are underfunded, and could face possible bankruptcy in many cases — revenues are down because of lower property and sales tax receipts. Then, you have the pension issues — probably underfunded in most cases.

Best of luck to you!!!

[Author]

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