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08-14-2008, 04:54 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Fixed Income Options
I'm about to roll over a CD and am less than thrilled with the nominal 4% for a 2 year CD. Does anyone have a non-mutual fund suggestion for "safe" fixed income. I want to know when the fixed income principle will be returned with a "guaranteed" amount. This would be very safe money.
I'm not interested in preferreds or mutual funds. This is the ultra-safe bucket.
I'm considering TIPS and just eating the low interest rate CD. I just thought I'd see what other people may have stumbled across.
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The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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08-14-2008, 05:01 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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OOh, ooh! I know, I know! Pay off your mortgage! Then refinance in the future to get your money back.
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08-14-2008, 05:10 PM
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#3
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,473
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Quote:
Originally Posted by 2B
I'm about to roll over a CD and am less than thrilled with the nominal 4% for a 2 year CD. Does anyone have a non-mutual fund suggestion for "safe" fixed income. I want to know when the fixed income principle will be returned with a "guaranteed" amount. This would be very safe money.
I'm not interested in preferreds or mutual funds. This is the ultra-safe bucket.
I'm considering TIPS and just eating the low interest rate CD. I just thought I'd see what other people may have stumbled across.
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It's a good question. I am not very thrilled with most bonds lately, but I have heard that municipal bonds are good.
I wouldn't want to invest in any long term CD's right now. I also wouldn't want to invest in gold.. Thorny problem. I have mine in MM (which isn't paying well) and bond funds right now (some of which seem to be worse). I have a little time to read and learn while they sit there losing ground with respect to inflation.
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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08-14-2008, 06:40 PM
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#4
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 206
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There are several FDIC savings accounts that are in the 3.5% range. Safe as a CD - almost the same interest and liquidity to move when the interest rates increase (as they must)
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I'm trying to find myself.* Have you seen me anywhere today?
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08-14-2008, 07:07 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,281
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Quote:
Originally Posted by 2B
I'm about to roll over a CD and am less than thrilled with the nominal 4% for a 2 year CD. Does anyone have a non-mutual fund suggestion for "safe" fixed income. I want to know when the fixed income principle will be returned with a "guaranteed" amount. This would be very safe money.
I'm not interested in preferreds or mutual funds. This is the ultra-safe bucket.
I'm considering TIPS and just eating the low interest rate CD. I just thought I'd see what other people may have stumbled across.
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here's a 5 year cd at 5.28%: Bank Deals - Best Rates and Deals
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08-14-2008, 08:38 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Munis. Buy a GO bond ad go back to sleep until maturity.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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08-14-2008, 08:48 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 2,020
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08-14-2008, 08:53 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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I think I'd rather go back to the 'pay off the mortgage' portion of the program.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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08-14-2008, 09:40 PM
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#9
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Recycles dryer sheets
Join Date: Sep 2007
Posts: 193
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Quote:
Originally Posted by 2B
I just thought I'd see what other people may have stumbled across.
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4.25% APY 6 mo. CD, FDIC, at a bank under US Comptroller letter to raise their capitol. Ads seem to be in local paper & last about 2 weeks. Seem to be restricted to local residents.
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08-15-2008, 12:01 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 7,422
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Quote:
Originally Posted by brewer12345
Munis. Buy a GO bond ad go back to sleep until maturity.
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Buying bonds directly or bond funds?
What are the yields and maturities?
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08-15-2008, 07:10 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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I neglected to say that this is in my IRA so munis and paying off the mortgage aren't viable options.
Many years ago I thought paying off the mortgage was a good idea (about 14% at the time). Unfortunately, I lost my job and suddenly had 3 months of living expenses including unemployment outside of my home equity. Since the biggest employer in town was laying people off in droves, home prices plummetted. I luckily got a new job quickly and the new employer did a home buy at my original purchase price.
Ever since then, having at least 1 year of living expenses readily available in an after tax account has been a basic feature of my financial planning.
I suspect that I'll get the short term CD and keep on with my original plan.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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08-15-2008, 08:49 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Quote:
Originally Posted by explanade
Buying bonds directly or bond funds?
What are the yields and maturities?
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If you want a specified sum at a particular time, single bond is the way to go. Yield depends on maturity and issuer, but they compare quite favorably with treasuries and CDs if you are in the 25% or higher bracket.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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08-15-2008, 12:13 PM
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#13
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Full time employment: Posting here.
Join Date: May 2008
Posts: 546
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Muni bonds or short-term cash CDs (6 month CD). As others have stated, with interest rates and inflation in the state that they are now, once the election date is over, interest rates may finally start to rise, hurting bond prices. Would not lock in long-term to that!
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08-15-2008, 02:27 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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Quote:
Originally Posted by CitricAcid
Muni bonds or short-term cash CDs (6 month CD). As others have stated, with interest rates and inflation in the state that they are now, once the election date is over, interest rates may finally start to rise, hurting bond prices. Would not lock in long-term to that!
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That's why I want to stay reasonably short. I don't think that interest rates will go up before the election no matter what. If the banking mess calms down with inflation where it is, I expect a quick 2% increase in the fed funds. More could easily follow.
I bought a 4.25% CD that matures in Dec 2009. I didn't want to go out 4 years for 5%.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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