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Safe returns
Old 10-26-2009, 06:34 AM   #1
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Safe returns

Other than Cds and MM, were is a relatively safe place to keep 80-100k.
GNMAEs ?
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Old 10-26-2009, 08:55 AM   #2
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I like to use Ginnie Maes but I'd be reluctant to chunk that much money in all at once because they are high right now. Of the ones I already own, I have to be comfortable with the possibility that they could lose up to a dollar per share. Since I bought them at a variety of prices and I've held them for a few to many years, I'm okay with that now. I factor that possible loss into my PF evaluation.
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Old 10-26-2009, 09:00 AM   #3
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I own a GNMA fund, but they are not safe. The fund value dropped by about 10% in 2008, but has since recovered.

You have to decide what you mean by safe. If you mean, no possibility of losing any money in the short or long term, then you are talking about CDs and other FDIC-insured deposits.
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Old 10-26-2009, 09:25 AM   #4
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Quote:
Originally Posted by bobbee25 View Post
Other than Cds and MM, were is a relatively safe place to keep 80-100k.
GNMAEs ?
CDs and MM, that's it........

Remember, even Cds and MM are subject to interest rate risk.......so keep things short for now.........
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Old 10-26-2009, 11:10 AM   #5
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It might help to know what time-frame you anticipate using this money. If it is your emergency fund then as others said MM or CD's. If it something you are setting aside for something 5, 10 years down the road then that changes things.

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Old 10-26-2009, 11:13 AM   #6
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Other than Cds and MM, were is a relatively safe place to keep 80-100k.
GNMAEs ?
High Yield Savings Accounts may provide a better yield than CDs, depending on the time frame for holding the funds. FDIC insured as well. The risk is that the rates won't stay at the level you bought at, but then, neither does the MM account.

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Old 10-26-2009, 11:20 AM   #7
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I like to use Ginnie Maes but I'd be reluctant to chunk that much money in all at once because they are high right now. Of the ones I already own, I have to be comfortable with the possibility that they could lose up to a dollar per share. Since I bought them at a variety of prices and I've held them for a few to many years, I'm okay with that now. factor that possible loss into my PF evaluation.
You may want to consider putting more emphasis on your anticipation of the fund's performance going forward and less on when you bought shares and what you paid for them. Other than tax issues (long term vs short term gains, etc.) which are impacted by that historical info, only future performance matters now.

I'm not suggesting that you shouldn't use Ginnie Maes, just pointing out that your point of view may be inappropriately focused on the past when only future performance matters. I do that frequently too......
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Old 10-26-2009, 02:30 PM   #8
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If you need immediate access to the money check out the GE Interest Plus program. It's not FDIC insured but is relatively safe and provides decent returns on short term money.

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Old 10-27-2009, 07:56 AM   #9
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Looking at GNMAEs over the last 20 years I don't see any time where the total return went to less than 3% for the year. They seem to be pretty consistant in a 4% to 6% range, am I missing something ?
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Old 10-28-2009, 01:15 PM   #10
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If you need immediate access to the money check out the GE Interest Plus program. It's not FDIC insured but is relatively safe and provides decent returns on short term money.

2soon
Looks like they only have 2-2.3% rate. For an uninsured (and in fact questionable, if you trust headlines) establishment, I'd say that's a low rate - and it can change every week too. Insured MM / savings accounts will get you close to 2%. (E.g. Dollar Bank has 154-day guaranteed 2% MM account.)
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Old 10-29-2009, 10:09 PM   #11
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OP:

Agree with others, Safety = CD, MM.

If you want higher rates, more risk.

I just purchased a 7yr. 4% CD, with Pentagon Federal Credit Union, today.

Two years ago, I purchased 7yr and 5 yr CD's at 6 1/4 %

No one has a "crystal ball", most of the time the experts are wrong.

Sometimes, earning a lower rate, while waiting for rates to rise, is a loser's game.....

I have an informal "ladder", of CD's. But I will break the rule, if I think I can get a good CD rate, ie. 6% or greater, and lock in a longer term.
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