cd question

[meos1]

CD are a suckers game. You get 5% on your money while the inflation is reported at 7+? No way. I am not interested.

It is all about risk profile. CDs have their place. For people who need their money in one or two years the market can be a risky game. It would not surprise me to see a market drop of 20% in the next year or two. And that could be catastrophic for some. CDs are a stupid play for those with a 5+ year horizon.

This. Only money that has plans in the next few years are in CDs. But a guaranteed 5% for short term is nothing to poo poo

Loaning someone money today at 5% when reported inflation is 7% (We all know energy and food are inflated and would bring that number in closer to 10%) is a guarantee to go backwards. Now consider this as the government launders money for Joe, I mean, provides aid to Ukraine with cash it does not have. The value of the dollar is going to go down down. So in six to 18 months that money you loaned is going to have a purchasing power of less than 1 dollar. So not only are you getting eaten by the inflation but your government is ensuring that you lose buying power tomorrow. Add on that the government is proping these banks up with all manner of aid and tax relief. CDs are a suckers game.

[FatMan]

CD are a suckers game. You get 5% on your money while the inflation is reported at 7+? No way. I am not interested.

It is all about risk profile. CDs have their place. For people who need their money in one or two years the market can be a risky game. It would not surprise me to see a market drop of 20% in the next year or two. And that could be catastrophic for some. CDs are a stupid play for those with a 5+ year horizon.

This. Only money that has plans in the next few years are in CDs. But a guaranteed 5% for short term is nothing to poo poo

Loaning someone money today at 5% when reported inflation is 7% (We all know energy and food are inflated and would bring that number in closer to 10%) is a guarantee to go backwards. Now consider this as the government launders money for Joe, I mean, provides aid to Ukraine with cash it does not have. The value of the dollar is going to go down down. So in six to 18 months that money you loaned is going to have a purchasing power of less than 1 dollar. So not only are you getting eaten by the inflation but your government is ensuring that you lose buying power tomorrow. Add on that the government is proping these banks up with all manner of aid and tax relief. CDs are a suckers game.

So what is your recommendation for funds that will be needed in the next year or two? What is your winner's game in this case?

[Rollo Tomassi]

Texas Hold-em

[ddbird]

CD are a suckers game. You get 5% on your money while the inflation is reported at 7+? No way. I am not interested.

It is all about risk profile. CDs have their place. For people who need their money in one or two years the market can be a risky game. It would not surprise me to see a market drop of 20% in the next year or two. And that could be catastrophic for some. CDs are a stupid play for those with a 5+ year horizon.

This. Only money that has plans in the next few years are in CDs. But a guaranteed 5% for short term is nothing to poo poo

Loaning someone money today at 5% when reported inflation is 7% (We all know energy and food are inflated and would bring that number in closer to 10%) is a guarantee to go backwards. Now consider this as the government launders money for Joe, I mean, provides aid to Ukraine with cash it does not have. The value of the dollar is going to go down down. So in six to 18 months that money you loaned is going to have a purchasing power of less than 1 dollar. So not only are you getting eaten by the inflation but your government is ensuring that you lose buying power tomorrow. Add on that the government is proping these banks up with all manner of aid and tax relief. CDs are a suckers game.

You’re only correct if you have another way for a higher, guaranteed return. You’re suffering the 7% inflation regardless it’s not like that only applies to people that hold CDs haha

[meos1]

CD are a suckers game. You get 5% on your money while the inflation is reported at 7+? No way. I am not interested.

It is all about risk profile. CDs have their place. For people who need their money in one or two years the market can be a risky game. It would not surprise me to see a market drop of 20% in the next year or two. And that could be catastrophic for some. CDs are a stupid play for those with a 5+ year horizon.

This. Only money that has plans in the next few years are in CDs. But a guaranteed 5% for short term is nothing to poo poo

Loaning someone money today at 5% when reported inflation is 7% (We all know energy and food are inflated and would bring that number in closer to 10%) is a guarantee to go backwards. Now consider this as the government launders money for Joe, I mean, provides aid to Ukraine with cash it does not have. The value of the dollar is going to go down down. So in six to 18 months that money you loaned is going to have a purchasing power of less than 1 dollar. So not only are you getting eaten by the inflation but your government is ensuring that you lose buying power tomorrow. Add on that the government is proping these banks up with all manner of aid and tax relief. CDs are a suckers game.

So what is your recommendation for funds that will be needed in the next year or two? What is your winner's game in this case?

There not but a few and the risk is higher. However, the stock market, real estate, and starting your own business come to mind.

[cullenbryant]

+congressman

[RMan]

So what is your recommendation for funds that will be needed in the next year or two? What is your winner's game in this case?

Dividend paying stock that doesn't change much. Make sure it is solid dividend company that doesn't cut dividends.

Money market where it is reasonably same as the CD interest. Fidelity pays 4.95% right now, so if looking at a 5% CD, I rather have the money market...as long as I think rates aren't going down in the near future.

[clw54]

"Dividend aristocrats," companies that have raised their dividends for 25 consecutive years.

[ms70]

Last August I got in on a 5 year locked in at 5.5%

[Barndog]

No way I’d tie cash to a 5-year instrument

[FatMan]

"Dividend aristocrats," companies that have raised their dividends for 25 consecutive years.

Yep, ask MacCrimmon how 2023 Dividend Aristocrat WBA has fared in the last year. Oh, I'll help. Down 50% and cut their dividend in half. There are no guarantees even in the safest stocks. If someone needs money within a two year period stocks are not the answer. With inverted interest rates today a better place to park is in a high yield money market fund like SWVXX. Currently paying 5.14% and you can have your money tomorrow if needed.

[meos1]

"Dividend aristocrats," companies that have raised their dividends for 25 consecutive years.

Yep, ask MacCrimmon how 2023 Dividend Aristocrat WBA has fared in the last year. Oh, I'll help. Down 50% and cut their dividend in half. There are no guarantees even in the safest stocks. If someone needs money within a two year period stocks are not the answer. With inverted interest rates today a better place to park is in a high yield money market fund like SWVXX. Currently paying 5.14% and you can have your money tomorrow if needed.

You answered your question. Hehehehhe.

[FatMan]

"Dividend aristocrats," companies that have raised their dividends for 25 consecutive years.

Yep, ask MacCrimmon how 2023 Dividend Aristocrat WBA has fared in the last year. Oh, I'll help. Down 50% and cut their dividend in half. There are no guarantees even in the safest stocks. If someone needs money within a two year period stocks are not the answer. With inverted interest rates today a better place to park is in a high yield money market fund like SWVXX. Currently paying 5.14% and you can have your money tomorrow if needed.

You answered your question. Hehehehhe.

Most certainly better than your answer. Hehehehe

Seriously? Short term money into a business? Short term into real estate? Absolutely ridiculous. Short term money is all about liquidity, of which neither of your ideas has. Both are cash flow hogs too. I know, I have owned many businesses and own plenty of real estate. Don't get me wrong, I have made plenty of money with those over years of holding. But very dumb idea for short term money. And, when rates are not inverted which is better than 90% of the time CDs create more value than money market funds. A fools game they are not. You will not get rich with a CD but they are a valuable instrument for many situations.

[WhyNot]

So what is your recommendation for funds that will be needed in the next year or two? What is your winner's game in this case?

Dividend paying stock that doesn't change much. Make sure it is solid dividend company that doesn't cut dividends.

Money market where it is reasonably same as the CD interest. Fidelity pays 4.95% right now, so if looking at a 5% CD, I rather have the money market...as long as I think rates aren't going down in the near future.

This

[meos1]

"Dividend aristocrats," companies that have raised their dividends for 25 consecutive years.

Yep, ask MacCrimmon how 2023 Dividend Aristocrat WBA has fared in the last year. Oh, I'll help. Down 50% and cut their dividend in half. There are no guarantees even in the safest stocks. If someone needs money within a two year period stocks are not the answer. With inverted interest rates today a better place to park is in a high yield money market fund like SWVXX. Currently paying 5.14% and you can have your money tomorrow if needed.

You answered your question. Hehehehhe.

Most certainly better than your answer. Hehehehe

Seriously? Short term money into a business? Short term into real estate? Absolutely ridiculous. Short term money is all about liquidity, of which neither of your ideas has. Both are cash flow hogs too. I know, I have owned many businesses and own plenty of real estate. Don't get me wrong, I have made plenty of money with those over years of holding. But very dumb idea for short term money. And, when rates are not inverted which is better than 90% of the time CDs create more value than money market funds. A fools game they are not. You will not get rich with a CD but they are a valuable instrument for many situations.

Im fairly poor. Short term money is the amount of cash that comes in to pay the bills. I don't have the luxury to let the cash sit around.