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Money Matters
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Old 04-20-2011, 11:12 PM   #1
Amoeba
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Fixed income choices?

Looking to park some spare cash in a fixed income account, already have plenty of exposure to equities in other accounts.

So where are you guys putting your cash? Banks are only paying around 1.15% interest and CDs are not much better at around 2-2.5% short term payouts. I was doing 3% rewards checking before but it's a bit of a hassle. You guys getting anything better than 2%?
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Old 04-21-2011, 02:47 AM   #2
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Just parking your cash you will lose about 6-15% of buying power every year. Buy commodities.
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Old 04-21-2011, 10:00 AM   #3
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I have that covered in other investments. Not looking to take on any risks with these funds. Fixed income suggestions please.
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Old 04-21-2011, 11:35 AM   #4
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I have that covered in other investments. Not looking to take on any risks with these funds. Fixed income suggestions please.
How liquid does this cash need to be?
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Old 04-21-2011, 11:58 AM   #5
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Fairly liquid. It's a down payment for future house, so may need to be withdrawn within the next 5 years.
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Old 04-21-2011, 12:13 PM   #6
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Might want to look intro some municipal revenue bonds in your area. Sometimes you need a good local financial insitution that gets dibs on these issues. These can sometimes pay 4-5% and they are exempt from federal taxes, the issue is liquidity, you need to see what the maturity dates are.
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Old 04-21-2011, 12:37 PM   #7
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Hmm.. I live in California where municipalities and even the state may declare bankruptcy, lol. I've looked at bonds/bond funds before. Even though they carry relatively low risk there's still a chance of default. Plus we've all seen negative returns on bond funds before.

I have pretty specific goal with this stash and want a risk free return. I'm guessing that leaves laddered CDs, money market, checking/savings and the like. Any similar fixed income instrument that pays out a couple percent or more?
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Old 04-21-2011, 01:24 PM   #8
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Hmm.. I live in California where municipalities and even the state may declare bankruptcy, lol. I've looked at bonds/bond funds before. Even though they carry relatively low risk there's still a chance of default. Plus we've all seen negative returns on bond funds before.

I have pretty specific goal with this stash and want a risk free return. I'm guessing that leaves laddered CDs, money market, checking/savings and the like. Any similar fixed income instrument that pays out a couple percent or more?
I think you have pretty much sumed up the risk free items.
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Old 04-22-2011, 01:11 PM   #9
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go buy bonds, cash them out when you buy the house. Or park your cash in a credit union account. I believe some yield more then 2%.
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Old 04-22-2011, 01:17 PM   #10
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That's what I'm looking for. Which credit union pays more than 2%?
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Old 04-23-2011, 12:21 AM   #11
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5 year Treasury notes are yielding 2.1% right now. If interest rates rise and you need to sell early, you'd take a loss but if you stick it out for all five years, you'll still get the stated yield, although inflation will probably eat all of that away.
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Old 04-23-2011, 03:45 AM   #12
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or do a private loan. lol....

10% in 3 years. <100k
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Old 04-23-2011, 10:41 AM   #13
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"No risk" returns is the key here. I have money in other assets classes, but looking for the best riskless returns for these cash.
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Old 06-07-2011, 11:48 AM   #14
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Sounds like you'll want an MMF, or maybe you can find a savings acct with better than average interest. They both give you the most liquidity, if you could potentially withdraw the money any time between now and 5 years from now. There are tax exempt MMFs out there too, if you're worried about taxes.
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Old 06-07-2011, 11:59 AM   #15
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Sounds like you'll want an MMF, or maybe you can find a savings acct with better than average interest. They both give you the most liquidity, if you could potentially withdraw the money any time between now and 5 years from now. There are tax exempt MMFs out there too, if you're worried about taxes.
Most MMF I've seen pay under 1%. Even tax-free ones would not reach my goal of relative conservative of 2% stable return... Wonder if laddering CDs is the only way to achieve that.
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Old 06-09-2011, 06:14 AM   #16
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It really depends on what level of liquidity you want, it's true the MMFs don't offer too much yield, and it sounds like they're more liquid than you need. I used to have some money in a tax free MMF, but I actually get more interest in a normal savings acct through USAA as long as I maintain a balance >10k. It's still not the level that you're looking for. Laddering CDs sounds good, probably your best bet for the growth you want.
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