Help with CDs...very new at this...

[UpQuark]

I went to the local Edward Jones office at the recommendation of two different tax preparers

My parents used Edward Jones, so for a couple years after my mom died I had money at both EJ and Fidelity.

When I did my taxes there were more tax deductible items from the Edward Jones forms, and probably it depends on the particular advisor, but I'd say for a person (like me) who is not educated on tax issues of investments, the Edward Jones person was clearly better than Fidelity.

Also, the EJ person put money into an IRA for me at a time when I had no idea those existed or that I could contribute, so that was another plus for EJ, and I suppose that is another reason why the money I inherited didn't increase my taxes-owed until after I moved it to Fidelity.

Fidelity advisors have totally been horrid for me, I had some money that had come from a pension buyout and was in a Roth IRA at Fidelity, just sitting in the core MM position for years, and even though I went for face-to-face account reviews with their free advisors, that was not caught, which made the Fidelity advisor worse than useless because I thought they looked at the accounts and advised, but apparently they just run the asset allocation analysis tool.

Eventually I learned enough to notice it, and then the benefit of Fidelity was that I could call them in the middle of the night on the weekend and get it looked at, and then (finally) I got some advice. Retrospectively it still wasn't the best advice (more conservative investment than I think a Roth IRA should have), but at least it was finally growing.

That was years ago in another city when I had less money, but this year in my current city with more money my Fidelity advisor here was just as useless. I had sold out of the funds that they kept advising over the years and I was so clear in the meeting about not wanting much in international funds, and not liking the bond funds they used before, and not wanting any balanced sort of fund where I couldn't sell specifically bonds or specifically equities. The meeting had included some input from one of Fidelity's fixed income advisors and he had really good sounding suggestions, but when my advisor sent me his plan, it was exactly all the stuff I had explained I didn't want.

So, from my experience, I think a good fiduciary Edward Jones person would be better at managing investments and considering taxes and income needs than the free Fidelity advisors. But, I don't know how to compare the costs. I've seen that the investments I inherited have load fees, but I'm not sure with the Fidelity funds whether the fund fee cost ratio includes the fees from all the sub-funds within the funds?

 

[gwill1010]

Cindy, I see you're starting from scratch. Good for you.
I invested myself for many years then handed a bunch of $ to EJ about 20 years ago. It wasn't a terrible decision, but I think I wouldn't have done it if I had it to do over again. I would not go with an advisor if you're just starting out.

1-Live on Youtube for months. You'll get good and bad advice but you'll learn. If you go to EJ you get the advice from one person who's been fed the corp line. Easy way out if you want it.
2 - MM are a good place to park money at this time. Paying more than CDs. I've got a good bit in a high yield savings account - 4.3% which CD competitive at this time(Synchrony).
3 - Google/youtube "couch potato investing". I think this is where I'm heading. It's very simple and I think over the long term it's as good as any advisor.
4 - Google/study "dollar cost averaging" if you've got a pile of $ to invest.
5 - Vanguard and similar are your friends. Low fees and lots of options.
6 - Sounds like you need to get internet savvy. Pain, but it's not that hard. Investment club, neighbor, friend?

 

[frayne]

CDs are a valuable addition to a diversified portfolio, offering safety, predictable returns, and stability, especially for conservative investors or those nearing retirement. CDs are low-risk investments insured by the FDICup to $250,000 per institution. They provide fixed interest rates and reliable income, making them ideal for budgeting and retirement planning. CDs also help balance riskier investments like stocks, stabilize portfolios, and offer term flexibility, with options from a few months to several years. Strategies like laddering allow regular access to funds while earning higher returns than traditional savings accounts. While CDs have their limitations like lower liquidity, modest returns compared to riskier assets, and potential inflation risks, they are excellent for those prioritizing capital preservation and steady income, serving as a financial anchor in uncertain times.

 

[Al18]

UpQuark,
I believe you are spreading misinformation about the free Fidelity advisors. I’ve met them 3 times over the past few years, and they pointed out they were not qualified to give financial advice. They are able to show you how to use the free tools, such as the Retirement Income planner, the cash flow tool and gave basic advice such as the difference between an IRA and RothIRA, what a brokered CD was, etc. They told me certified financial planners were available for a fee - this requires a contract and signatures.

 

[SecondCor521]

1-Live on Youtube for months. You'll get good and bad advice but you'll learn. If you go to EJ you get the advice from one person who's been fed the corp line. Easy way out if you want it.

For someone who is starting out, I'm not sure this is a good suggestion.

Without a frame of reference, it is easy to mistake bad advice for good on YouTube (and reddit and all the others). It's also easy to mis-apply advice that might be decent for some people but does not apply to the OP's situation.

A particularly pernicious problem with Internet advice is that high production value (i.e., the advice being given comes with fancy charts and a person in a business outfit with some credentials after their name) doesn't always mean good advice. It can be mediocre to bad and, again, unless you know better, can easily fool you.

 

[CindyBlue]

All such good advice, and a very interesting discussion. I am learning a lot, and very grateful for the opportunity. I don't know what "money markets" are, but then again I don't know much of anything regarding money except how to save it. I'll be looking this up right away.

And you are right about the tax people...why did they recommend EJ? I think it's because the know the specific person there and like and trust her...one of the tax people has her money invested there. I liked her, but felt really rushed, whether it was her intention or not.

Meanwhile, I'm in the process of transferring my 403b money to a Schwab IRA This solves the RMD problem. Schwab seems to be a much better choice, as many people like them and because I can talk to someone in person about how to invest it conservatively enough to make me as comfortable as possible.

I also transferred my bank money to two CDs, a 6 month and a 9 month, after a discussion with the fellow at the bank. Both CDs are earning more than when they were in the savings and checking accounts. I left enough to keep me comfortable in the savings and checking.

I had to take a deep breath to start both processes...I know so little and I'm playing with our life savings. Fingers crossed that I'm doing the right thing.

 

[audreyh1]

Great progress!

 

[Jerry1]

Great progress!

Agree. As has been said, there’s no need to hurry on this. You’re doing well. Take small steps until you understand and soon you’ll have your portfolio on auto pilot. Keep checking in here as this is a great sounding board.

 

[jazz4cash]

I may be ignorant but no longer see the reason to buy CD's--you commit your money for a specified period of time. Pay a penalty if you need it sooner and you can get higher rates in many money markets.

Many of us expect money market rates will fall as the Fed reduces rates. They’ve already started actually so locking in current rates seems like a good move.