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Old 07-17-2017, 06:53 AM
 
4,229 posts, read 1,909,438 times
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Quote:
Originally Posted by NickofDiamonds View Post
I'm assuming that you're stating the obvious for other people who may not know what they are,
I was merely noting the approximately non-existent nature of CD's as an investment vehicle. They have never been good for anything other than use as a convenient short-term parking place for cash.

Quote:
Originally Posted by NickofDiamonds View Post
The logic behind them was not to tie your money up in them but to have them mature at different times...
Laddering can be done with any fixed-term investment.

Quote:
Originally Posted by NickofDiamonds View Post
There were no money market funds back then....
Money market funds got their start in the 1970's.

Quote:
Originally Posted by NickofDiamonds View Post
The 1990's seem so long ago and the investment strategies from that period now seem so foreign.
They were the same as the strategies of today -- a balancing of risk and return.
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Old 07-17-2017, 08:40 AM
 
Location: Londonderry, NH
41,505 posts, read 49,588,323 times
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The biggest rat in in charge of the cage so the rest of the rats are cashing in.
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Old 07-17-2017, 11:24 AM
 
9,368 posts, read 4,748,920 times
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They are all rats. Just a different rat this time.
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Old 07-18-2017, 08:18 AM
 
375 posts, read 208,011 times
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Quote:
Originally Posted by Pub-911 View Post
CD's are typically bank time deposits, just like passbook savings accounts except with penalties for early withdrawal These are the low rungs on the investment ladder. They have never been much more than convenient short-term parking spots -- insured locations where inflation could be at least partially held at bay. Only twice so far in this century (2006 and 2008) has the net real rate of return on CD's been positive. The good old days were not so good at all if one were tied up in CD's.
I dsagree that CD's were never more than convenient short-term parking spots. Back in the 1980's and 90's, they were good, secure investments. I agree that the return rates in this century have been horrible.

CD's allowed my grandparents and parents to accumulate a good amount of wealth in the 1980's and 90's. Some were getting double digit returns. They were a perfect investment for them because they allowed the interest to compound and they were secure. Those CD's set them up for worry-free retirement.

My mother is still mad at the Fed for cutting interest rates to rock bottom. She says they took away secure investments for savers so they could lend out the money cheaply for all of those McMansions people insisted on, which many later lost. She's right. While she now makes nothing near what she used to in interest on the CD's, she continues to use them and only takes the interest to use. At 80, she needs that security CDs offer, and she still manages to save money. But, she would never have such a great amount of savings without the CD's from the '80's and '90's. Because of timing, she was lucky she didn't have to be pushed into the market to get some type of return. She and my father never could have withstood the ups and downs of the market. They were lucky to get the high rates years ago, but they were smart to have enough saved to be able to buy the CD's in the first place.
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Old 07-18-2017, 08:35 AM
 
4,229 posts, read 1,909,438 times
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Beware of money illusion. Net real rates of return on CD's have never been good. They offered double-digit rates only when inflation was in double-digits. Inflation-expectations are of course a major component of interest rates. Recently, we have had no inflation at all, or very little of it. CD rates have only followed suit.

The Fed from 2007 forward was concerned with frying the biggest fish first. The state of the global financial system was far more important at the time than the state of marginal returns to retirees.
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Old 07-18-2017, 01:40 PM
 
Location: East Coast of the United States
15,680 posts, read 18,237,335 times
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Answer to the thread question:

Because, it is.
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Old 07-18-2017, 03:11 PM
 
Location: Londonderry, NH
41,505 posts, read 49,588,323 times
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As we are both retired with decent pension and great health insurance I ask myself why do we have any investments at all. What good are they going to do for us when we are in some absurdly expensive "elder care" home? What do we do when they eventually run out? I am eligible for a VA nursing home but my wife is not. What is going to happen to her when our investments run out?


If people think that the current "health insurance" crisis is a problem just wait until the elderly Baby Boomers need intensive care as they sicken before they die.


FWIW - we invested in Mutual funds in the market and avoided the mortgage bond fiasco. I am unsure of where to put our money so it will be relatively "safe" when this bubble bursts. I am certain this bubble will burst but not when.
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Old 07-18-2017, 07:36 PM
 
230 posts, read 277,799 times
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Default The Stock Market is in a precarious level

the chart shows the RSI(Relative Strenght Index) of the Dow Jones Industrial average divided by the Unemployment rate. Also shown is a short-term and long-term standard deviation of that RSI. As you can see in the chart the long term Standard deviation(blue line) has been declining for years and appears to have hit a low. I believe it will start to advance higher based on historical data,and when it does that means the most likley move would be for the RSI to move lower which will be due to the DJIA dropping or the Unemployment rate moving higher or both. Basically the movement in the RSI has been complacent in recent years hence the dropping Long term St. Deviation, but won't remain at that level for long. I know I will get reprimanded for posting this here but I feel that it's pertinent.






http://i.imgur.com/YMNPpzul.png
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Old 07-20-2017, 10:22 AM
 
9,368 posts, read 4,748,920 times
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I don't read CD regarding stock market any more. Too many negative sentiment. I made a lot more money in the stock market when I don't read CD. There's always somebody here preaching doom and gloom. Just saying.
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Old 07-20-2017, 10:41 AM
 
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Crowdsourcing is counter-productive in a great many applications.
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