Invest in CDs now or wait?

J

JohnHL

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With interest rates rising, the Fed set to meet Nov 2, and the election Nov 8, would it make sense to wait 20-30 days for higher interest rates or start buying CDs now.

The ladder approach appeals to me and I have already availed myself on the I Bond.

What say the wise Forum?

John?
 
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Yeah, stocks. I'm 70 next birthday and I ain't betting on making it. I plan to live forever and so far I'm right. Question of time before I'm wrong. I've been wrong on money just about always. But I did live through the "Peanut Farmer Debacle of the '70's and remember 12% CD's. '90's got them close to 8%. I figure 6% in the near future, who knows when the bubble pops. They ain't sold a new house around here in months and there are thousands available. Current management makes the Peanut Farmer look like a nuclear sub commander. Oh, yeah........ Joe
 
CD's are paying what? 3-4%? Yes, better than watching stocks go down, but not a long term plan imo.

As history tells us time and again, once we get going, the markets will take off again.

We have an account with Fidelity. We are fully invested all the time. Fidelity gives us tax, inheritance, and planning advice. Always there for us.Our decision to make. Very happy with them for 15 years now, haven't touched any of it.

Do what makes you sleep well at night, most importantly.
 
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The stock market is good advice, but not for me.

I guess my question is, will interest rates continue to rise, or will the fears of a coming recession and the election dampen the Fed's enthusiasm for rate increases?

Higher rates inevitable over the short term?

Prognosticate, please.

John
 
John, I am not an economist but history tells us higher rates will/should slow business investment and tamp down consumer spending. The housing market is the best example.

Guaranteed, they will over tighten, economies don't start and stop on a dime.
 
The best way to double your money is to fold it in half and put it back in your pocket. Cash will always be there. Can't say the same about dividends and interest.
 
Also standing firm on Equities.
But it's not that easy!
Have Laddered Bonds for years.
Now have Bonds maturing, will probably turn that money into Short Term Feds, Agency Bonds, CDs maybe.
Not prepared to go long at this time.
Subject to change anytime depending on what the DC Needle Necks do.
Some forces there seem Hell Bent to Raise Interest Rates, others trying to lower them.
 
ladder13 said:
If you put one dollar in a sock drawer 30 years ago it is not a dollar, it is 50 cents. You lose money by doing nothing anyway.

https://www.google.com/url?sa=t&rct...=1&year=1992&usg=AOvVaw1T_LYGHWlapTofMZJ-Xe_0
Click to expand...

Right you are that is why my portfolio is weighed heavily in "widows and orphan stocks" and REITs. Both medical and apartment ownership.

Yes I have lost a bunch of money on paper, but the dividends have not been cut as of yet, they just keep on rolling in. I have been doing the market for a long time and it has always came back and then went on to do better.

Course at this time my age and general health is against me but I hope to see things rebound again while I'm still on the green side of the grass!:D
 
I've been investing in Hand Ejectors and SeaRays. I dunno about profits and losses, but both make me smile. Watching my other investments makes me frown.

On a serious note I just got a 6% CD thru LPL financial. Bonds, stocks and other platforms have collectively lost about 15% in recent years.

We intend to do a lot more traveling now, and all that expense will make me smile as well.
 
I know this about CDs. There is lost opportunity cost when you tie up your money. But I guess one could argue it's also costly to remove money from the market right now because you'll probably sell at a loss. I favor cash at the moment. All my dry powder will remain dry for a while. Cash is king when people start selling tangible assets.
 
I did a whole reworking of my portfolio in 2018. Went from spec. to solid mutual funs w/ Fidelity & T Rowe Price. In the past year or so we lost almost 30% of our investment. Put $$ in cash with the above and bought some CD's. My wife and I are 80 yrs old and in great health and cannot take chances any more. Will wait it out to see when the real bull market begins and go back in slowly.
 
Those oppose to keeping cash on hand. How much actual cash will you have after you pay Federal and State Taxes and Income Tax when your CD's reach maturity or you withdraw from your stocks and bonds and/or you need the money when the market is down?
 
BSA1 said:
Those oppose to keeping cash on hand. How much actual cash will you have after you pay Federal and State Taxes and Income Tax when your CD's reach maturity or you withdraw from your stocks and bonds and/or you need the money when the market is down?
Click to expand...

More than that dollar you stuffed under your mattress.
 
BSA1 said:
Those oppose to keeping cash on hand. How much actual cash will you have after you pay Federal and State Taxes and Income Tax when your CD's reach maturity or you withdraw from your stocks and bonds and/or you need the money when the market is down?
Click to expand...

More than you will have keeping cash.
Cash - You are losing almost 1% a month in buying power.
PS I have cash on hand. But it's a small percentage of my net worth.
Also have some Gold and Silver.
When you are fortunate enough to have money, it's a struggle to maintain your buying power.
If you ain't got much money, you got different problems.
Down South of here they say - Plata O Plomo.
I got both.
 
Rates will go up.
A high yield saving account is a good hold over.
Ladder concept is smart with staggered maturity dates.
Personally I am not shopping for stock deals until next year.
The poop will hit the fan!

P.S try to keep away from ESG big banks!
 
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If you are uncomfortable with the market and want a safe place to park the cash, laddering CD's is a tried and time-tested strategy. To answer the question you asked, my guess would be that rates on cd's will rise but if you are laddering the point or two increase will get picked up in your future purchases. Pigs get fat hogs get slaughtered. I am thinking about taking my cash and buying 1 year cd's for x amount each month for a year. Once you hit 12 months you can dollar cost average back into the market roll the cd over at the new rates available or cash out and take the interest. Better than just letting a pile of cash sit for the bank to make money by making loans with your savings account.
 
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pharmer said:
Yeah, stocks. I'm 70 next birthday and I ain't betting on making it. I plan to live forever and so far I'm right. Question of time before I'm wrong. I've been wrong on money just about always. But I did live through the "Peanut Farmer Debacle of the '70's and remember 12% CD's. '90's got them close to 8%. I figure 6% in the near future, who knows when the bubble pops. They ain't sold a new house around here in months and there are thousands available. Current management makes the Peanut Farmer look like a nuclear sub commander. Oh, yeah........ Joe
Click to expand...

Rumor has it that the Peanut Farmer Naval Academy graduate never qualified for an operational watch on a nuke boat. Went on to manage the world's largest economy for four years. Insight into possible reasons for current baby formula shortage.
 
When I retired 13 years ago I was very heavy into triple tax free muni bonds. At that time most of what I had was between 4.75% and 6%. About 9 years after that many of them were called and I was forced to invest in the market (which I dislike) but wanted to earn more than the 1.5% bonds were offering. Just last week I've stared buying bonds again. Just yesterday I got a bunch at just over 5%. Considering they are triple tax free that is equivalent to about 7.5% taxable. I can live with that.

I am sure they will increase in the coming weeks but how much - no one knows! Personally I like Muni's and sleep a lot better with a good portfolio of them vs the manipulated markets. Still, I do believe that not putting all your eggs in one basket is prudent.

Just bought I bonds for the Mrs. and I too. 9.62% is not terrible even though it's taxable.
 
I'm waiting to buy some CDs. Feds are supposed to meet in two weeks to up the int. again. I can buy 18 month CDs now at 3.10%, but waiting a month should up the rate to about 3.75-4.0 %. Also, as "chief38" posted, Treasury "I" bonds are a pretty good and safe investment also; limited to $10,000 per individual.:)
 
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ggibson511960 said:
Rumor has it that the Peanut Farmer Naval Academy graduate never qualified for an operational watch on a nuke boat. Went on to manage the world's largest economy for four years. Insight into possible reasons for current baby formula shortage.
Click to expand...

True, but for this reason. His father died, and he requested a hardship discharge to go home and take over the family business. Request granted.
 
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