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Old 05-06-2015, 11:48 PM   #21
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Synchrony Optimizer 2.35% 5 years w/ 6 month penalty. We've been very pleased with customer service and their website works good. We also opened a HY Savings to keep 1-2 year dollars. 1.05 APY.
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Old 05-07-2015, 07:09 AM   #22
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Here's another site to monitor while shopping for CDs:

CD (Certificate of Deposit) Rates, Money Market Rates, High Interest Savings Accounts

I am sitting on a pile of cash. Most is in Stable Value in my old 401k at ex-w*rk. I did get in on the 3% Penfed 5 yr CD, but wasn't able to pile on at the time as I hadn't turned 59.5 at the time (and we were all thinking that the trend was UP at the time, weren't we)? Found a 1.5% 1 year CD for our ROTH IRA's , but renewal on that is coming up. Now I have the added burden of managing my 95 year old mother's accounts and need CDs for some of that.
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Old 05-07-2015, 09:02 AM   #23
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Don't forget to check with your broker for brokered CDs. I see they have some 10 years @ 3% right now.
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Old 05-07-2015, 09:28 AM   #24
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We handle the situation by not having CD's but instead for our non-equity allocation we have a mix of 80% in 8 very short/short/intermediate bond funds including two muni-funds & one international bond fund, & the other 20% in GLD. Why put all your eggs in the US Government basket? US dollar goes up/goes down on & on.
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Old 05-07-2015, 02:09 PM   #25
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Thanks for the inputs. Appears we are all destined to adjust to living with
lower rates for the foreseeable future.
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Old 05-07-2015, 03:29 PM   #26
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Thanks for the inputs. Appears we are all destined to adjust to living with
lower rates for the foreseeable future.

I believe in the fact there is no free lunch and no absolute safe guaranteed high yield. However with that being said, I closed out all my CDs and IBonds and rolled them mostly into 6-6.5% investment grade utility preferreds. Outside of '09 short crash the ones I have mostly stay right around par. One issue I own CNLPL "crashed" all the way down to around $42 ($50 par) in '09. Hasnt missed a payment since issued back in the 1960s. Of course if you believe the 10 year Treasury is going to 6-7% these type of issues will take a beating on their stock price. Plus, you cant go in and buy these types with a 100k chunk at a time either.


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Old 05-07-2015, 03:35 PM   #27
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Will have to reinvest CD's maturing next year. (7yr@ 4%). Funny, 6 years ago, Financial Advisors, were saying, DO NOT GO LONG. Do not buy long term CD's.

Advice, was, interest rates will rise shortly, So buy short term. Did not
take there advice. Here it is 6 years later. Interest rates are lower, and
still have not gone up. Actually, have fallen.

How are other's handling this situation?
Putting money in CD's in not investing. You have to invest (in stocks and bonds).
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Old 05-07-2015, 03:53 PM   #28
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I believe in the fact there is no free lunch and no absolute safe guaranteed high yield. However with that being said, I closed out all my CDs and IBonds and rolled them mostly into 6-6.5% investment grade utility preferreds. Outside of '09 short crash the ones I have mostly stay right around par. One issue I own CNLPL "crashed" all the way down to around $42 ($50 par) in '09. Hasnt missed a payment since issued back in the 1960s. Of course if you believe the 10 year Treasury is going to 6-7% these type of issues will take a beating on their stock price. Plus, you cant go in and buy these types with a 100k chunk at a time either.


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Nice alternative idea. I have some in PFF, while very liquid the .47% expense ratio could be better. Yields about 6%.

Do you know of a site just for these preferreds? Your example looks very thinly traded. Would be nice to escape the annual expense of the ETF.
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Old 05-07-2015, 03:59 PM   #29
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Putting money in CD's in not investing. You have to invest (in stocks and bonds).

I disagree. It's just another option in an asset allocation. Many financial advisors group CDs in with bonds rather than cash. A CD is like a low risk bond where you put in your money for a percentage return. Bonds are the same if you hold to maturity, but they have more risk of lowered values if interest rates increase, along with a possible gain, if the bond must be sold prior to maturity.
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Old 05-07-2015, 04:02 PM   #30
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Remember in the early 1980s CDs @ 14%! Wow.
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Old 05-07-2015, 04:19 PM   #31
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Do you know of a site just for these preferreds? Your example looks very thinly traded. Would be nice to escape the annual expense of the ETF.
Quantumonline.com
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Old 05-07-2015, 04:33 PM   #32
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Quantumonline.com
+1. Excellent resource for preferreds.
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Old 05-07-2015, 04:48 PM   #33
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Nice alternative idea. I have some in PFF, while very liquid the .47% expense ratio could be better. Yields about 6%.

Do you know of a site just for these preferreds? Your example looks very thinly traded. Would be nice to escape the annual expense of the ETF.

MooreBonds is correct. Though some are not directly listed and you have to enter the common stock ticker symbol then hit the link to "other securities from this parent company. For example CNTHP and CNLPL are couple of preferreds from ES ( Eversource, used to be Northeast Utilities). The preferreds were issued when Connecticut Power and Light were a stand alone company, currently yielding around 6.2%. BGE-B is a trust preferred that was issued under Baltimore Gas and Electric, and is now under EXC (Excelon). Most of these types are "fenced in utility preferreds" which has provisions that keep the parent company from raping the bought out public utility since they now own the common shares.
Yes, I like the no expense ratios from purchasing. Make sure you study them a bit and put a limit order in. Usually you only want to buy a few hundred shares at a time to not "move the market". Most of my money is in about 6 of them and I add on occasion. If they haven't missed a payment in 50 years and are still financially strong today, that is enough confidence for me.

So yes if you want liquidity these aren't for you. Most shares were bought 20- 50 years ago and just stuffed in an institutional closet. The more liquid ones are down near the 5% range which doesn't appeal to me. I don't plan on ever selling though. The 15% tax provision is very beneficial to me as I was stuck giving 25% plus state tax on CDs.


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Old 05-07-2015, 04:56 PM   #34
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Jim, added thought in the ETF arena....My dad bought a few individual ones but did not want to get strung out on buying a lot of them so he split the bulk of his money on PFF and PFXF. PFXF is a good counter balance to PFF as it is non financial preferreds. PFF is mostly financial. There is some overlap but no banks. Plus, since they are too big they cant delve into the preferreds I buy so they also "stretch" the term preferred and buy some convertibles and such. But like PFF, you cant escape the expense fee which is about what PFF is.


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Old 05-07-2015, 04:58 PM   #35
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+1. Excellent resource for preferreds.
Agreed. That said, I do not even look at it these days. Too much duration in that stuff and not worth the risk IMO.
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Old 05-07-2015, 05:06 PM   #36
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MooreBonds is correct. Though some are not directly listed and you have to enter the common stock ticker symbol then hit the link to "other securities from this parent company. For example CNTHP and CNLPL are couple of preferreds from ES ( Eversource, used to be Northeast Utilities). The preferreds were issued when Connecticut Power and Light were a stand alone company, currently yielding around 6.2%. BGE-B is a trust preferred that was issued under Baltimore Gas and Electric, and is now under EXC (Excelon). Most of these types are "fenced in utility preferreds" which has provisions that keep the parent company from raping the bought out public utility since they now own the common shares.
Yes, I like the no expense ratios from purchasing. Make sure you study them a bit and put a limit order in. Usually you only want to buy a few hundred shares at a time to not "move the market". Most of my money is in about 6 of them and I add on occasion. If they haven't missed a payment in 50 years and are still financially strong today, that is enough confidence for me.

So yes if you want liquidity these aren't for you. Most shares were bought 20- 50 years ago and just stuffed in an institutional closet. The more liquid ones are down near the 5% range which doesn't appeal to me. I don't plan on ever selling though. The 15% tax provision is very beneficial to me as I was stuck giving 25% plus state tax on CDs.


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Thanks for the info on the preferred stocks. I am curious why you state you plan to never sell them?
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Old 05-07-2015, 05:22 PM   #37
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Thanks for the info on the preferred stocks. I am curious why you state you plan to never sell them?

Trying to make money solely by trading these things is nearly impossible. I am in it for the yield and income. They are income vehicles. Presently though I just reinvest the income into buying more. In fact if they would go down in price it would not bother me as I would get a better yield with the new purchases.
I understand why people choose not to buy them, but I like the yield and if am going "long" on yield I would rather take 6.25% investment grade than 3-4% from some long bond or fund.
I liked a post one guy made on them... Its like being in line to get fed at the cafeteria. Who cares who gets feed first (bond holders) as long as there is enough food for everyone? I play it pretty safe and buy the ones who provide enough food for everyone to eat and I will wait my turn to be fed for the higher yield.


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Old 05-07-2015, 07:04 PM   #38
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I disagree. It's just another option in an asset allocation. Many financial advisors group CDs in with bonds rather than cash. A CD is like a low risk bond where you put in your money for a percentage return. Bonds are the same if you hold to maturity, but they have more risk of lowered values if interest rates increase, along with a possible gain, if the bond must be sold prior to maturity.
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Old 05-07-2015, 07:14 PM   #39
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Do you have any debt? Let's say you have a mortgage at 4%. Paying down some principal with you spare cash will give you a guaranteed ROI better than any CD you can get nowadays.

I am employing this strategy with a mortgage on a rental property.
Paying down the principal on a loan has nothing in common with an ROI.

The clue is the words. ROI = Return On Investment. Paying down the principal balance of a loan isn't an investment, it's just ... paying down the balance. All it does is to pull in the final payment. And you don't have any additional money, like you do with an investment, you just eliminate the mortgage payment sooner --- 20-30 years from now.
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Old 05-07-2015, 07:15 PM   #40
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Saying rates may never go up seems like saying stocks have reached a permanently high plateau.
I included "significantly" regarding CD rates. Have next to no expertise regarding the Stock Market but I guess that could be right too. Hope not as I will be placing a "significant" amount in the SM VTSMX/VTSAX and VFINX/VFIAX index funds.
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