Charles Schwab??

[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!!!

[barnaby33]

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

BWAHAHAHAHHAAHAHAHAHAAHAHAHAHAHAHAAH. Two words, Jaw-bone. Thats all the Fed is going to do about interest rates. Maybe a 1/4 here or even dare we hope 1/2 point. The Fed is trying and failing to stave off deflation.

There are times, and this is one where being ultra-conservative is the most dangerous place to be. The reasons are two fold. First those in power are deliberately debasing our currency and more important the investments that people think are safest really aren’t. Take bonds for example. How many bond funds hold toxic junk? I don’t know and neither do most of the people who own them.

I’d love to see Berspankme raise rates meaningfully at least up to the real rate of inflation, but it ain’t going to happen. If you are truly ultra conservative, buy some gold, buy some foreign currencies, or ETF equivalents and stocks in solid companies that do well in recessions (like MO). Thats about the safest thing you can do and keep your purchasing power.

[barnaby33]

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

BWAHAHAHAHHAAHAHAHAHAAHAHAHAHAHAHAAH. Two words, Jaw-bone. Thats all the Fed is going to do about interest rates. Maybe a 1/4 here or even dare we hope 1/2 point. The Fed is trying and failing to stave off deflation.

There are times, and this is one where being ultra-conservative is the most dangerous place to be. The reasons are two fold. First those in power are deliberately debasing our currency and more important the investments that people think are safest really aren’t. Take bonds for example. How many bond funds hold toxic junk? I don’t know and neither do most of the people who own them.

I’d love to see Berspankme raise rates meaningfully at least up to the real rate of inflation, but it ain’t going to happen. If you are truly ultra conservative, buy some gold, buy some foreign currencies, or ETF equivalents and stocks in solid companies that do well in recessions (like MO). Thats about the safest thing you can do and keep your purchasing power.

[barnaby33]

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

BWAHAHAHAHHAAHAHAHAHAAHAHAHAHAHAHAAH. Two words, Jaw-bone. Thats all the Fed is going to do about interest rates. Maybe a 1/4 here or even dare we hope 1/2 point. The Fed is trying and failing to stave off deflation.

There are times, and this is one where being ultra-conservative is the most dangerous place to be. The reasons are two fold. First those in power are deliberately debasing our currency and more important the investments that people think are safest really aren’t. Take bonds for example. How many bond funds hold toxic junk? I don’t know and neither do most of the people who own them.

I’d love to see Berspankme raise rates meaningfully at least up to the real rate of inflation, but it ain’t going to happen. If you are truly ultra conservative, buy some gold, buy some foreign currencies, or ETF equivalents and stocks in solid companies that do well in recessions (like MO). Thats about the safest thing you can do and keep your purchasing power.

[barnaby33]

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

BWAHAHAHAHHAAHAHAHAHAAHAHAHAHAHAHAAH. Two words, Jaw-bone. Thats all the Fed is going to do about interest rates. Maybe a 1/4 here or even dare we hope 1/2 point. The Fed is trying and failing to stave off deflation.

There are times, and this is one where being ultra-conservative is the most dangerous place to be. The reasons are two fold. First those in power are deliberately debasing our currency and more important the investments that people think are safest really aren’t. Take bonds for example. How many bond funds hold toxic junk? I don’t know and neither do most of the people who own them.

I’d love to see Berspankme raise rates meaningfully at least up to the real rate of inflation, but it ain’t going to happen. If you are truly ultra conservative, buy some gold, buy some foreign currencies, or ETF equivalents and stocks in solid companies that do well in recessions (like MO). Thats about the safest thing you can do and keep your purchasing power.

[barnaby33]

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

BWAHAHAHAHHAAHAHAHAHAAHAHAHAHAHAHAAH. Two words, Jaw-bone. Thats all the Fed is going to do about interest rates. Maybe a 1/4 here or even dare we hope 1/2 point. The Fed is trying and failing to stave off deflation.

There are times, and this is one where being ultra-conservative is the most dangerous place to be. The reasons are two fold. First those in power are deliberately debasing our currency and more important the investments that people think are safest really aren’t. Take bonds for example. How many bond funds hold toxic junk? I don’t know and neither do most of the people who own them.

I’d love to see Berspankme raise rates meaningfully at least up to the real rate of inflation, but it ain’t going to happen. If you are truly ultra conservative, buy some gold, buy some foreign currencies, or ETF equivalents and stocks in solid companies that do well in recessions (like MO). Thats about the safest thing you can do and keep your purchasing power.

[Anonymous]

I just read an article in the “~Finance and Investing~” portion of this page. It warns “US stock market priced for poor returns. The jist of the article is that it historically looked at the average valuation of the sp500 using multiples (price/earnings). The higher the average market multiple, the more expensive the the valuation. Then they divvy up annualized return over 10 years for each valuation. They conclude that the most expensive valuation gets very poor returns with an annualized return of 3.5%. The go on to say we are currently very safely in an expensive valuation so you probably should not invest considering that only rarely when in a expensive valuation do investors get good returns. These kind of articles or common in a down market. Trying to scare investors even more. Maybe you even know a little something about investing and read them and are convinced.

The article however glances over the fact that their valuation is an average of the past 10 years of earnings. And while it’s historically rare to have good returns in markets with similar average valuations over the past 10 years, the tech bubble we experienced is also rare with astronomical valuations that made no sense and lower earnings that other past booms. Using an average of all these lower earnings over the past 10 years leads to a average expensive valuation. Yes. But that, in my mind, does not indicate that the current price is extremely overvalued (most expensive 20% of valuations in history) as they suggest.

As I mentioned earlier, I believe now is a good time to consider investing in the US stock market. Of course it is prudent to watch earnings and P/E ratios before investing, but if you take the article at face value with claims for poor returns over 10 years for investing today, you be scared into thinking that it won’t be a good time to invest for many years to come and would probably decide to horde money away in a 3-5 year CD missing the possibility in investing in the downturn altogether. I suspect that average earning for most companies will come down and the market will react resulting in good investment opportunity. Remember, the market is efficient i.e. quick but tends to overreact to news.

Any other comments on my analysis of this article are welcomed.

[Anonymous]

I just read an article in the “~Finance and Investing~” portion of this page. It warns “US stock market priced for poor returns. The jist of the article is that it historically looked at the average valuation of the sp500 using multiples (price/earnings). The higher the average market multiple, the more expensive the the valuation. Then they divvy up annualized return over 10 years for each valuation. They conclude that the most expensive valuation gets very poor returns with an annualized return of 3.5%. The go on to say we are currently very safely in an expensive valuation so you probably should not invest considering that only rarely when in a expensive valuation do investors get good returns. These kind of articles or common in a down market. Trying to scare investors even more. Maybe you even know a little something about investing and read them and are convinced.

The article however glances over the fact that their valuation is an average of the past 10 years of earnings. And while it’s historically rare to have good returns in markets with similar average valuations over the past 10 years, the tech bubble we experienced is also rare with astronomical valuations that made no sense and lower earnings that other past booms. Using an average of all these lower earnings over the past 10 years leads to a average expensive valuation. Yes. But that, in my mind, does not indicate that the current price is extremely overvalued (most expensive 20% of valuations in history) as they suggest.

As I mentioned earlier, I believe now is a good time to consider investing in the US stock market. Of course it is prudent to watch earnings and P/E ratios before investing, but if you take the article at face value with claims for poor returns over 10 years for investing today, you be scared into thinking that it won’t be a good time to invest for many years to come and would probably decide to horde money away in a 3-5 year CD missing the possibility in investing in the downturn altogether. I suspect that average earning for most companies will come down and the market will react resulting in good investment opportunity. Remember, the market is efficient i.e. quick but tends to overreact to news.

Any other comments on my analysis of this article are welcomed.

[Anonymous]

I just read an article in the “~Finance and Investing~” portion of this page. It warns “US stock market priced for poor returns. The jist of the article is that it historically looked at the average valuation of the sp500 using multiples (price/earnings). The higher the average market multiple, the more expensive the the valuation. Then they divvy up annualized return over 10 years for each valuation. They conclude that the most expensive valuation gets very poor returns with an annualized return of 3.5%. The go on to say we are currently very safely in an expensive valuation so you probably should not invest considering that only rarely when in a expensive valuation do investors get good returns. These kind of articles or common in a down market. Trying to scare investors even more. Maybe you even know a little something about investing and read them and are convinced.

The article however glances over the fact that their valuation is an average of the past 10 years of earnings. And while it’s historically rare to have good returns in markets with similar average valuations over the past 10 years, the tech bubble we experienced is also rare with astronomical valuations that made no sense and lower earnings that other past booms. Using an average of all these lower earnings over the past 10 years leads to a average expensive valuation. Yes. But that, in my mind, does not indicate that the current price is extremely overvalued (most expensive 20% of valuations in history) as they suggest.

As I mentioned earlier, I believe now is a good time to consider investing in the US stock market. Of course it is prudent to watch earnings and P/E ratios before investing, but if you take the article at face value with claims for poor returns over 10 years for investing today, you be scared into thinking that it won’t be a good time to invest for many years to come and would probably decide to horde money away in a 3-5 year CD missing the possibility in investing in the downturn altogether. I suspect that average earning for most companies will come down and the market will react resulting in good investment opportunity. Remember, the market is efficient i.e. quick but tends to overreact to news.

Any other comments on my analysis of this article are welcomed.

[Anonymous]

I just read an article in the “~Finance and Investing~” portion of this page. It warns “US stock market priced for poor returns. The jist of the article is that it historically looked at the average valuation of the sp500 using multiples (price/earnings). The higher the average market multiple, the more expensive the the valuation. Then they divvy up annualized return over 10 years for each valuation. They conclude that the most expensive valuation gets very poor returns with an annualized return of 3.5%. The go on to say we are currently very safely in an expensive valuation so you probably should not invest considering that only rarely when in a expensive valuation do investors get good returns. These kind of articles or common in a down market. Trying to scare investors even more. Maybe you even know a little something about investing and read them and are convinced.

The article however glances over the fact that their valuation is an average of the past 10 years of earnings. And while it’s historically rare to have good returns in markets with similar average valuations over the past 10 years, the tech bubble we experienced is also rare with astronomical valuations that made no sense and lower earnings that other past booms. Using an average of all these lower earnings over the past 10 years leads to a average expensive valuation. Yes. But that, in my mind, does not indicate that the current price is extremely overvalued (most expensive 20% of valuations in history) as they suggest.

As I mentioned earlier, I believe now is a good time to consider investing in the US stock market. Of course it is prudent to watch earnings and P/E ratios before investing, but if you take the article at face value with claims for poor returns over 10 years for investing today, you be scared into thinking that it won’t be a good time to invest for many years to come and would probably decide to horde money away in a 3-5 year CD missing the possibility in investing in the downturn altogether. I suspect that average earning for most companies will come down and the market will react resulting in good investment opportunity. Remember, the market is efficient i.e. quick but tends to overreact to news.

Any other comments on my analysis of this article are welcomed.

[Anonymous]

I just read an article in the “~Finance and Investing~” portion of this page. It warns “US stock market priced for poor returns. The jist of the article is that it historically looked at the average valuation of the sp500 using multiples (price/earnings). The higher the average market multiple, the more expensive the the valuation. Then they divvy up annualized return over 10 years for each valuation. They conclude that the most expensive valuation gets very poor returns with an annualized return of 3.5%. The go on to say we are currently very safely in an expensive valuation so you probably should not invest considering that only rarely when in a expensive valuation do investors get good returns. These kind of articles or common in a down market. Trying to scare investors even more. Maybe you even know a little something about investing and read them and are convinced.

The article however glances over the fact that their valuation is an average of the past 10 years of earnings. And while it’s historically rare to have good returns in markets with similar average valuations over the past 10 years, the tech bubble we experienced is also rare with astronomical valuations that made no sense and lower earnings that other past booms. Using an average of all these lower earnings over the past 10 years leads to a average expensive valuation. Yes. But that, in my mind, does not indicate that the current price is extremely overvalued (most expensive 20% of valuations in history) as they suggest.

As I mentioned earlier, I believe now is a good time to consider investing in the US stock market. Of course it is prudent to watch earnings and P/E ratios before investing, but if you take the article at face value with claims for poor returns over 10 years for investing today, you be scared into thinking that it won’t be a good time to invest for many years to come and would probably decide to horde money away in a 3-5 year CD missing the possibility in investing in the downturn altogether. I suspect that average earning for most companies will come down and the market will react resulting in good investment opportunity. Remember, the market is efficient i.e. quick but tends to overreact to news.

Any other comments on my analysis of this article are welcomed.

[Anonymous]

guess bernake has not proven himself as of yet. I don’t claim to know what is going on the with currency market. was just suggesting a general trend based on the derivatives market for currency and federal funds futures. I am not convinced but a contrarian position in this market is not out of question.

Second, investing in other currencies CD is risky. Interest rate parity (theory that amounts to something like arbitrage is impossible in a free market) suggests that the interest rate of a foreign currency is only higher than the interest rate for a domestic currency if the domestic currency is undervalued by the difference between the two rates. The fundamental concept in laymens terms is “there is no fundamental advantage to borrowing or lending in one currency over another.” This is of course theory and clearly you can make money (because unlike theory there are many other factors involved) but in many cases you can also lose money. Theory does often hold in the long term but definitely not in the short term. Guess a class on capital markets is in order if you intend to invest in foreign CDs anyways. good luck

[Anonymous]

guess bernake has not proven himself as of yet. I don’t claim to know what is going on the with currency market. was just suggesting a general trend based on the derivatives market for currency and federal funds futures. I am not convinced but a contrarian position in this market is not out of question.

Second, investing in other currencies CD is risky. Interest rate parity (theory that amounts to something like arbitrage is impossible in a free market) suggests that the interest rate of a foreign currency is only higher than the interest rate for a domestic currency if the domestic currency is undervalued by the difference between the two rates. The fundamental concept in laymens terms is “there is no fundamental advantage to borrowing or lending in one currency over another.” This is of course theory and clearly you can make money (because unlike theory there are many other factors involved) but in many cases you can also lose money. Theory does often hold in the long term but definitely not in the short term. Guess a class on capital markets is in order if you intend to invest in foreign CDs anyways. good luck

[Anonymous]

guess bernake has not proven himself as of yet. I don’t claim to know what is going on the with currency market. was just suggesting a general trend based on the derivatives market for currency and federal funds futures. I am not convinced but a contrarian position in this market is not out of question.

Second, investing in other currencies CD is risky. Interest rate parity (theory that amounts to something like arbitrage is impossible in a free market) suggests that the interest rate of a foreign currency is only higher than the interest rate for a domestic currency if the domestic currency is undervalued by the difference between the two rates. The fundamental concept in laymens terms is “there is no fundamental advantage to borrowing or lending in one currency over another.” This is of course theory and clearly you can make money (because unlike theory there are many other factors involved) but in many cases you can also lose money. Theory does often hold in the long term but definitely not in the short term. Guess a class on capital markets is in order if you intend to invest in foreign CDs anyways. good luck

[Anonymous]

guess bernake has not proven himself as of yet. I don’t claim to know what is going on the with currency market. was just suggesting a general trend based on the derivatives market for currency and federal funds futures. I am not convinced but a contrarian position in this market is not out of question.

Second, investing in other currencies CD is risky. Interest rate parity (theory that amounts to something like arbitrage is impossible in a free market) suggests that the interest rate of a foreign currency is only higher than the interest rate for a domestic currency if the domestic currency is undervalued by the difference between the two rates. The fundamental concept in laymens terms is “there is no fundamental advantage to borrowing or lending in one currency over another.” This is of course theory and clearly you can make money (because unlike theory there are many other factors involved) but in many cases you can also lose money. Theory does often hold in the long term but definitely not in the short term. Guess a class on capital markets is in order if you intend to invest in foreign CDs anyways. good luck

[Author]

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