Consumerism Commentary - Latest Comments in Grabbing the Last of the 5.65 APY CDs

Re: Grabbing the Last of the 5.65 APY CDs

Rev — Tue, 06 Nov 2007 11:21:30 -0000

I think Tom may have cruised on over something that I kept seeing "my emergency funds". I persnoally am not risk averse but an emergency fund is not meant to be invested it should be in CDs or a High Yield MMA.

Re: Grabbing the Last of the 5.65 APY CDs

ChrisCD — Mon, 05 Nov 2007 09:51:42 -0000

CDs are good for preservation of principal. If funds are for expenses that one will have over the next 5 years, CDs are a legitimate investment vehicle.

In addition, one has to determine their risk tolerance. One commentor noted buying Bershire shares. As I understand it, those shares are quite pricey and out of reach for most investors. If you are not risk tolerant and/or in the later stages of life, CDs again are legitimate.

Re: Grabbing the Last of the 5.65 APY CDs

thomas — Mon, 05 Nov 2007 03:01:08 -0000

pretty decent rate. I don't think the interest rates will jump back up in a year, but who am I to predict their crazy nature.

For those who might be nervous because this deal is Countrywide don't be. The CDs are FDIC insured and you will not lose your money.

Re: Grabbing the Last of the 5.65 APY CDs

kitty — Sun, 04 Nov 2007 18:11:49 -0000

Tom,
It all depends on how soon you might need the money. If you know you wouldn't need these money for 10 years or so and wouldn't care if there is a stock market crash in the meantime, then stock market is great.

But if you might need the money in the next couple of years, you really should keep it closer. Stocks don't grow consistently. It may take years to get back what you lost. Lots of technology stocks, for example, are still well below their internet bubble heights.

Also, consider that layoffs and stock market crashes often happen at the same time. You don't want to be forced to sell because you need the money when the market is at its bottom.

I have some money in stocks and some in CDs. Given that I am a little older, my allocation may be somewhat conservative, but even if you are young it may make sense to have at least a small percentage of your savings safe.

Re: Grabbing the Last of the 5.65 APY CDs

Sasha — Fri, 02 Nov 2007 12:52:36 -0000

Jon,

Yes, I just checked and saw it's at 5.40, so I'm glad I applied when I did. At least I know my nervousness was justified.

Patrick,

Thanks for your feedback - you definitely seem to understand where I'm coming from here.

Re: Grabbing the Last of the 5.65 APY CDs

Sasha — Fri, 02 Nov 2007 12:34:15 -0000

Tom,

I'm glad to hear your perspective. I agree that most people wouldn't even consider relying on a savings account rate of return for anything. I'm not the world's savviest investor, but am very risk-averse, so that's where I feel most comfortable placing my emergency funds, but I do plan to diversify more into stocks and funds once I understand enough not to make giant mistakes. I'm treading carefully.

Re: Grabbing the Last of the 5.65 APY CDs

Jon — Fri, 02 Nov 2007 10:40:40 -0000

well, it's down to 5.40%, but that's still a bit better than 4.XX or passbook at 0.25%!

re:tom-
You've made some good moves, but also dealt with some higher risk than some people are comfortable with. Your returns could have easily gone the other way. I'm not attacking you, just the comparison of apples to kumquats...
A CD is a lower risk vehicle than options.
Some out there might actually argue that options aren't investments at all, and are, like the rest of the stock market, merely speculation.

Re: Grabbing the Last of the 5.65 APY CDs

Patrick — Fri, 02 Nov 2007 06:32:45 -0000

I think it is a wise move to use the CDs for your situation. You are dealing with an indeterminate time period and don't know when you will need the money. That sounds very smart to me.

I just bought some CD's for my wife and I, and I built a 5 yr CD ladder because we have cash above our emergency funds, but we are anticipating possible life changes in the next few years. Since we don't know when we will need the money, it makes more sense to go with a guaranteed CD, vs. buying equities.

The rates we got weren't 5.65%, but I felt the were competitive and they are with our main financial institution which is convenient. (We also didn't drop 10k into a single CD).

I think you did a great job.

Re: Grabbing the Last of the 5.65 APY CDs

Tom — Fri, 02 Nov 2007 03:18:18 -0000

Oh man, I come off as arrogant and stuff and then I misspell due. Sorry!

Re: Grabbing the Last of the 5.65 APY CDs

Tom — Fri, 02 Nov 2007 03:17:52 -0000

I disagree with your usage of CDs. I actually had quite a sum in CDs until I reached a certain age, and now that they're coming do, I'm putting them in the stock market. I played with options for a bit and almost doubled what I put in, and I'm taking another 75k cd and putting it into 20 shares of berkshire hathaway class B. With a growth of 26% in the last year and 78% over the last 5, I believe I'm gonna do a lot better than I would if I had just renewed the CD.

Banks are for those with poor investment plans.