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Maximizing Short Term Yield
Old 02-17-2004, 06:23 PM   #1
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Maximizing Short Term Yield

I am not yet retired, but have a 2-3 year horizon in my sights. *Recently, though a moderate windfall I received some unexpected cash. *I would like to park this cash in something for 6 to12 months while I can think about a best investment choice for the longer term and how to rebalance what I have. *CD's are my easy choice, but am wondering about higher paying parking lots. *Any help for now and also my process of reevaluating? *

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Re: Maximazing Short Term Yield
Old 02-17-2004, 06:35 PM   #2
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Re: Maximazing Short Term Yield

Short-term rates are getting loooow. I was going to suggest a Ford Money Market account, but their rate just dropped from 2.8% to 2.3%. Still better than most 1-yr CDs.

A popular place to park, and even a good long-term bet, is the Vanguard Short-Term Corporate fund. Currently yielding 2.89%, but you'll be subject to NAV fluxuations.

What I used to do for short-term parking was buy a zero-coupon bond. Rates are typically better than what you'd get for a typical short-term bond, but I haven't bought one in a couple years.

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Re: Maximizing Short Term Yield
Old 02-17-2004, 07:47 PM   #3
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Re: Maximizing Short Term Yield

Vanguard's Short Term Corporate is a good choice
and very liquid. The duration is about 1.8 years so
even if short term rates go up, which many expect,
you would probably do better than parking in a
6 mo CD.


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Re: Maximizing Short Term Yield
Old 02-18-2004, 10:18 AM   #4
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Re: Maximizing Short Term Yield

Same here with the short term corporate account, thats my short term slush fund. I also have an account with ingdirect that pays 2% with no fees. There was a lengthy discussion on the short term corp fund with few if any dissenters that it should be safe for a cash fund alternative.

If you decide to go safer and open the ingdirect account, find someone here that already has one and have them refer you, then you'll both get a cash bonus.
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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