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it may be quite a while before that happens. even if the fed left the market if investors around the world feel longer term rates are okay where they are then not much will change.
the fed is buying 85 billion a month in a market that trades 1 trillion a month.
the global bond markets are 100 trillion dollars. it will be investors who decide where longer term rates go not the fed when push comes to shove.
waste of money. Buy a bell weather dividend producing stock instead, just don't do it right now. Trust me when I say the markets are overvalued here and bullishness levels through the roof.
Want to be more aggressive, buy REM... a basket of real estate investment trusts in ETF form. High dividend, higher risk, but they've done well the last few years, and will continue to do well because... without the fed artificially keeping interest rates low, the economy will collapse. REM is on sale right now.
Disclaimer: This is not investment advice, it's merely a bunch of words and letters pasted randomly onto a messageboard without any meaning whatsoever.
I don't think rates can go any lower on shorter term (less than an year) CDs. Right now, CDs are only good if you want to bank money and make a tad bit of interest. You can buy longer term CDs, but I wouldn't. There are brokerage accounts where you can by brokered CDs, and right now, I'm buying two or three month CDs that pay only .2, but that is better than the .01 the money market account pays. However, I want my money to be a liquid as possible and I want to absolutely preserve the principle, and buying various two or three month CDs helps with that.
Even when rates are higher, typically after taxes and inflation the real returns ranged from low to negative.
usually the higher the rates the higher inflation is.
Getting 13% in 18% inflation back in the day was a loser. no other asset class has had as many negative return years as cash instuments did historically.
OP: ^^This is correct.
CDs are a savings vehicle. They are not really an investment. Savings generally don't grow your money. They typically do not outpace the rate of inflation, although they sometimes can by a percentage point or two, but rarely more than that.
Investments typically are more long term vehicles. They typically earn significantly more than the inflation rate, but they will lose money in some years. That is why they are long term vehicles. If you are putting the money away for 40 years, losing money in some of those years is not the end of the world if you can earn 6-8% over that 40 year period (sometimes more if you're lucky).
Typical investments for retirement usually involve stocks and bonds. Normally, you can buy a fund which will pick the investments for you. They are called mutual funds. You'll see a lot of people referring to them on this board as simply "funds". (E.G. "Index funds" are one type of mutual fund).
Go to the library and get a book on the basics of investing.
hi guys I am thinking about using barclays online savings account https://www.banking.barclaysus.com/index.html anyone got experience with their online savings account? any problems? thanks
online savings account as long as they are FDIC insured....then it should be no problem huh? after FDIC just look at their rates, if they got debit card and whatever you need in the bank?
I'm new to city-data, but whenever I google things like these, I always get threads from city-data, so I figured I'd make an account and ask here.
I'm 25 years old and want to start investing some money. That's pretty much the long and the short of it. I would like to invest money now, so that when I'm 55~65 or what have you, I have a steady, reliable income. Looking towards the future.
From what I've read, CD's are the most safe and reliable way to get the ball rolling on this, and on the topics I read, they spoke of 5% interest. That seemed pretty good. It'd add up pretty nicely over the years and really begin to work out. That was until I checked out bankrate.com and saw that it was closer to 1.5% than it was 5%.
So, as someone who knows nothing at all about investing but still wishes to get involved, what can you tell me about CDs? Are they simply not worth investing in anymore? 1.5% looks like it'd provide some really lackluster yields - even in the long-term.
Ideally, I wanted to do something like invest 2k every year and just let it compound and save up, but it sounds like the rates just keep getting lower and lower and lower.
Thanks!
While this thread got off-track a bit, there's good advice throughout.
If you don't have any investing experience, a CD is an excellent place to start to hold emergency money or investing money until you're comfortable with more involved investing. (I still always recommend the free investing classes at Morningstar.)
There is supposition that CD rates will hit 2.65% by 2015, better, but not what you'd call an investment vehicle. I keep a variety of long-term CD's as a percentage of my total investments, but I'm (ahem) a lot older than you, so take less risks now.
I'd suggest building up your savings/CD's to the level of an adequate emergency fund before venturing into mutual funds.
The number one rule of investing is--invest in what you understand. Until you're comfortable looking at stocks or mutual funds, stick with savings and CD's. (Or go with an advisory firm.)
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