Re: Anybody looking for investments ?
- From: "JC" <dontbother@xxxxxxxxxxxxxxx>
- Date: Thu, 14 Aug 2008 17:45:45 GMT
"Gary" <not@xxxxxxxx> wrote in message news:m7r8a41sdigsaa1mvk3hhqtp0sn8heoucq@xxxxxxxxxx
On Thu, 14 Aug 2008 16:52:31 GMT, Rumpelstiltskin
<PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote:
On Thu, 14 Aug 2008 10:56:44 -0400, Gary <not@xxxxxxxx> wrote:
On Thu, 14 Aug 2008 13:52:05 GMT, Rumpelstiltskin
<PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote:
On Thu, 14 Aug 2008 07:22:10 -0400, Gary <not@xxxxxxxx> wrote:
On Wed, 13 Aug 2008 17:14:17 -0700 (PDT), mg <mgkelson@xxxxxxxxx>
wrote:
On Aug 13, 1:28 pm, Gary <n...@xxxxxxxx> wrote:On Wed, 13 Aug 2008 12:04:45 -0700 (PDT), mg <mgkel...@xxxxxxxxx>
wrote:
>On Aug 13, 10:17 am, Gary <n...@xxxxxxxx> wrote:
>> Not me !
>> "....Foreclosure fallout - Houses go for a $1 in >> Detroit..."
>> ".....The fact that a home on the city's east side was >> listed for $1
>> recently shows how depressed the real estate market has >> become in one
>> of America's poorest big cities....."
>>http://www.detnews.com/apps/pbcs.dll/article?AID=/20080813/METRO/8081...
>> Here we are in the middle of the biggest real estate and >> Wall Street
>> melt down since 1929. And what are people doing ? >> Looking for
>> "investments". The stock market is down about 20% and >> people are
>> looking for "investments". I wonder what they will look >> for when
>> it drops by about 80% -- which is about what it did in >> the
>> Depression ?
>> For anybody who is not a professional speculator -- the >> thing to do is
>> sell any stock they are stupid enough to still own. The >> same goes
>> for any real estate you don't live in. We are standing at >> the
>> precipice of a financial Depression and people are anxious >> to bail
>> out the professionals by trading their money for the pros >> stocks and
>> real estate. That's not terribly intelligent.
>> What bothers me most these days is that so-called >> professional
>> journalists on TV have no idea what words mean. They >> refer to Warren
>> Buffett and his ilk as "investors". Calling these old >> rascals
>> "investors" is the same as calling the Barbary pirates >> "sailors".
>> Anybody who is in the middle class -- or lower -- needs to >> batten down
>> the hatches and get into a full cash position and have all >> of their
>> cash where it can be guaranteed by the US Treasury. >> Bonds, CDs, etc.
>> Just remember when the final load of s---t finally hits the >> fan it
>> will "come as a thief in the night". And you will get no >> warnings.
>> Just a thought --- gj
>Before Joe Lewis' fight with world light heavyweight champion >Billy
>Conn. Conn, smaller than Louis, said that he planned to "hit >and run,"
>prompting Louis's famous response, "He can run, but he can't >hide."
>After 12 rounds, Conn was ahead on points, only to be knocked >out by
>Louis in the 13th round.
>The problem with the current economic situation is that >there's no
>safe place to run. I wouldn't be surprised if the average >retiree
>hasn't already lost about 20% of his wealth and buying power >and if
>inflation continues, he'll lose more.
That's what concerns me. I hate to see fellow retirees suffer
needlessly. Sure, if you make a bad buy in the market, and if you
hold it for 30 years, you'll be back even. But at our age we don't
have that much time to spare. I also hate to see people in the
late 40s and 50s get screwed out of a normal retirement just because
they take stupid investment advise. There is a time to invest and a
time to speculate. IMO the time for speculation ends when you
retire. Except, of course, for small sums of money that you can
afford to lose. But no more than you would be willing to lose in a
poker game.
Those are my thoughts also. I feel like a mouse trapped in a box with
no good moves. You can hope that the market has a sell-off so big that
it will obvious that it's time to get in, but it never happens that
way and if we do get a significant sell-off, I imagine it will be next
year sometime if the Fed is forced to raise rates.
I'm hoping for higher rates. I got out of the market in 2002, but
the only safe short term rates I could get was about 1.5%. So I did
without until 2006 at which time I began to get 5% - which made me
feel almost rich.
Bank CDs are now FDIC insured (a couple) up to $200K. So even with
a million, you only need 5 banks. There are about 10 in my town.
More than that I'd go into US Bonds.
I hadn't heard they'd raised the limit, but if it's only
"some" and not "all", I'll stick with staying under $100K
for now.
It's 200 for a couple. 100 for an individual. My understanding is
you can go up to $250K in one bank with an IRA.
I just took out a $95K one-year CD from WAMU
at 4.5%, which was the best rate I could find.
That's not bad. We had one rolled over last week -- six months -- at
4.15%. I was surprised -- what with all the short term treasuries
(2 yr and 5 yr) under 4%.
The money for this one came from a 7-month CD I had with
Countrywide at 5.25%. The renewal rate on that one was
only about 3.9% though, so I just closed the CD and looked
for something better. The thing I really dislike about CD's is
that they automatically renew if you don't stop them in time.
That's another example, I'd say, of things being set up to
favour the banks, since I'm pretty sure most every person is
like myself and would want the CD to automatically end
rather than automatically renew if you died, or forgot to stop
it from renewing, or were out of the country when it came
due, or something, In fact, for that reason, I wasn't going
to take out any more CDs, but then I saw how poor the other
available rates for guaranteed investments are, except for
i-bonds. The government is trying to kill i-bonds now though,
the way it killed ee-bonds. You can only put in $5,000 a
year into i-bonds now, which is not enough to make it really
worth the hassle of keeping track of them and certainly not
enough to be a major place to keep money. All of these
rates, of course, don't even keep up with "real" inflation.
The other treasury notes are piddling interest unless you
commit to 5 years or something like that, but considering
how unstable the dollar is these days, I'm certainly not
going to commit to long-term when even the official inflation
rate in a year or two might be over 10%.
I don't like to go more than a year with CDs at such low rates. You
never know when the rates will begin to rise.
Ah, yes. I wrote the stuff above this before I got to reading
that line.
I just
happened to run into that rate because I looked at the
WAMU site, it didn't show up in any of the search
engines for CD rates I had looked at. The engines did
list WAMU, but the highest rate they mentioned was
about 4.15%, not 4.50%.
Had this sub prime fiasco not happened, we would probably be getting
6.5 or 7 on one year CDs by now. Rates were moving up nicely when it
hit the fan.
When I was a kid, normal savings account rates were at least
5%, and you could get a pet dinosaur from the pet shops for
less than $100.
I'm looking forward to laddering 1 year 2 year and 3 year at over 8%.
You lost me. I'm too old for ladders: I hauled a 6'6" bookcase up
the steps to my flat yesterday and I'm not sure I would have made
it all the way up if a neighbor hadn't been walking by and helped
me with it. Actually, after he showed up, he did all the pushing
and I just lifted the top so that it could get over each step. I
hadn't met him before, he just moved next door in May. His name
is "Jed", which reminds me of "Jed Clampett", but I was the "Jed
Clampett" of the pair of us. He was less than half my age,
conceivably even a third of my age. I went out for a walk after
the bookcase, and it felt like I had sprained my neck. The neck's
OK today, though. Now I have to make a place to put the
bookcase by putting out an old chair or two plus an indoor closet
terrarium for growing tomatoes or other plants, that I got more
than seven years ago from a friend. My friend was once
enthusiastic about it, but at the point when he asked if I wanted
it, said it was a piece of junk. It's just been taking up space for
seven years, so obviously I'm never going to use it. Somebody
will take the terrarium, I'm sure. Maybe not the chairs.
Seriously though, I guess I should look into whatever
"laddering" is. I have heard the term before, but am ignorant of
its meaning.
Let's say that times were normal -- you'd be looking at CD rates
something like this.
1 year = 5%
2 year = 5.5%
3 year = 6 %
4 year = 6.5%
5 year = 7 %
Not knowing what the future brings, you would not want to put all
your money 5 years out for maximum return. However -- not doing it
robs you of potential income.
Here's my strategy -- when times get normal.
I'll divide my money into five parts. I'll then buy a CD for each of
the periods above.
For every 1,000 I have I will be invested thusly:
1000 @ 1 year = 5%
1000 @ 2 year = 5.5%
1000 @ 3 year = 6 %
1000 @ 4 year = 6.5%
1000 @ 5 year = 7 %
In one year I will replace the 1 year for a 5 year at 7%. (or
hopefully it will be higher) Then a year later I will get another 5
year at prevailing rates. And so on. I will end up with 1/5th my
capital coming due for re-investment every year and therefore be able
to increase my returns at present rates and never have to go too far
out at one time. If I make myself clear.
If you were smart you'd buy out your social security.
.
- References:
- Re: Anybody looking for investments ?
- From: mg
- Re: Anybody looking for investments ?
- From: mg
- Re: Anybody looking for investments ?
- From: Rumpelstiltskin
- Re: Anybody looking for investments ?
- From: Rumpelstiltskin
- Re: Anybody looking for investments ?
- Prev by Date: Re: Why I am not liberal
- Next by Date: Re: Hillary Clinton's name to be placed in nomination
- Previous by thread: Re: Anybody looking for investments ?
- Next by thread: Re: Anybody looking for investments ?
- Index(es):
Relevant Pages
|
