CD rates am I right here?

[Mainstreet]

That's sort of what I do with my Vanguard account for the most part. I have my direct deposit go to it with part of it staying in my money market fund and part going into VOO, their S&P ETF. Mostly set and forget. I haven't found a good reason to not stick with a low overhead S&P option. The managed fund really haven't been outperforming it on a consistent basis. They might for one quarter and then the next quarter be down. Most of the market action has centered around the mag 7 and they're all in it.

I thought about using Vanguard because of their low fees, but I'm mostly a novice at this stuff, not handling anything directly.

Sounds like S&P ETFs might be a good way to go for higher interest rates, safety and liquidity.

CD rates are not cutting it with inflation.

 

[Devilmaycare]

I thought about using Vanguard because of their low fees, but I'm mostly a novice at this stuff, not handling anything directly.

Sounds like S&P ETFs might be a good way to go for higher interest rates, safety and liquidity.

CD rates are not cutting it with inflation.

Hold up as sec. You have a couple things crossed up here. S&P ETF I wouldn't put in the safe category. It matches the S&P so it can go down. The long term trend line is always up though. It's a money market fund that's safe and more like a high interest savings. VMFXX is the vanguard one of those.

Since you said your a novice:

Money market fund is fund that invests in high-quality, short-term debt securities to provide investors with high liquidity and low risk.

Mutual fund is a fund that pools money to buy a portfolio of stocks or bonds to try to mitigate risk from singles stocks. Usually there's a theme to them like energy stock, large cap, small cap, etc. This is mainly what you buy in things like an IRA or 401k. Buys and sells are done at once after the market closes for the day.

Index funds are mutual funds that are indexed against some global list like the S&P500 or dow jones. Something like an S&P fund pretty much goes as the market goes.

Managed funds are mutual fund that are managed by someone trying to pick the stocks for it. They're only as good as the manager is lucky. Generally more volatile than an index fund.

Exchange traded fund (ETF) is fund similar to a mutual fund but is traded on an exchange. That means you can buy and sell intraday like stock. Generally the same as an index or managed fund but gives a little more power since you can buy and sell at will and don't have to wait until end of day for it to happen.

 

[Russ Smith]

I thought about using Vanguard because of their low fees, but I'm mostly a novice at this stuff, not handling anything directly.

Sounds like S&P ETFs might be a good way to go for higher interest rates, safety and liquidity.

CD rates are not cutting it with inflation.

Yeah the bulk of your money should be in stocks. CD's and HYSA are just for the cash you keep.

 

[Mainstreet]

Hold up as sec. You have a couple things crossed up here. S&P ETF I wouldn't put in the safe category. It matches the S&P so it can go down. The long term trend line is always up though. It's a money market fund that's safe and more like a high interest savings. VMFXX is the vanguard one of those.

Since you said your a novice:

Money market fund is fund that invests in high-quality, short-term debt securities to provide investors with high liquidity and low risk.

Mutual fund is a fund that pools money to buy a portfolio of stocks or bonds to try to mitigate risk from singles stocks. Usually there's a theme to them like energy stock, large cap, small cap, etc. This is mainly what you buy in things like an IRA or 401k. Buys and sells are done at once after the market closes for the day.

Index funds are mutual funds that are indexed against some global list like the S&P500 or dow jones. Something like an S&P fund pretty much goes as the market goes.

Managed funds are mutual fund that are managed by someone trying to pick the stocks for it. They're only as good as the manager is lucky. Generally more volatile than an index fund.

Exchange traded fund (ETF) is fund similar to a mutual fund but is traded on an exchange. That means you can buy and sell intraday like stock. Generally the same as an index or managed fund but gives a little more power since you can buy and sell at will and don't have to wait until end of day for it to happen.

Thanks for the clarification, especially defining the terminology. I was talking more about diversification. ETfs in S&P 500 companies sounds like a safer way to go as it spreads the risk over a number of businesses.

There is no guarantee one cannot lose money in the stock market. That's been why I have been individually hesitant to go there, although I receive a pension from a fund invested there.

 

[Devilmaycare]

Thanks for the clarification, especially defining the terminology. I was talking more about diversification. ETfs in S&P 500 companies sounds like a safer way to go as it spreads the risk over a number of businesses.

There is no guarantee one cannot lose money in the stock market. That's been why I have been individually hesitant to go there, although I receive a pension from a fund invested there.

No problem, I figured defining things would be helpful. Yes, I agree. As far as investing in the stock market, an S&P fund is a safer way to go. You're basically following the market as a whole then.

I mainly wanted to check the word safe since it can go down and you can lose money with it. When I hear safe I'm thinking something like a savings account or a money market fund since they don't go down and the main risk is the company going under and only being able to recoup up to the insurance caps.

 

[oaken1]

i still can't believe I just have like 24K in a CD that I'll never be able to cash because Wells Fargo says they have no record of it after they bought my bank years ago. And despite the fact that I LITERALLY still have the CD document.

The way the rules are stacked in favor of banks, corporations and anyone with enough money to say FU in this country is just pathetic.

depending on.."years"...wells had some serious issues roughly 20 years ago in regards to fraudulent accounts and predetory sales tactics and such. I forget all the specifics, but they were reprimanded in court and forced to make many things right...it had them really towing the line for a while and working to regain their reputation.
If your bank purchase fell anywhere in the timeline of their criminal activities you have some legal leverage to get your CD reinstated... just a matter of whether or not that 24k grew enough to make it worth hiring an attorney to get it done.

 

[Yuma]

Fidelity recently put out a video on the 60% - 40% where most people put 60% in stocks, and 40% in bonds. They were saying for right now they would advise 60% bonds and 40% stocks since the stock market prices are so high.

I am also looking at scenarios where stocks like Amazon, are boosting their returns by investing in Nvidia. So many of the big stocks are investing in AI stocks, that if the AI sector goes down at all, it's taking the rest of the market with it. Kinda scary.

 

[Yuma]

depending on.."years"...wells had some serious issues roughly 20 years ago in regards to fraudulent accounts and predetory sales tactics and such. I forget all the specifics, but they were reprimanded in court and forced to make many things right...it had them really towing the line for a while and working to regain their reputation.
If your bank purchase fell anywhere in the timeline of their criminal activities you have some legal leverage to get your CD reinstated... just a matter of whether or not that 24k grew enough to make it worth hiring an attorney to get it done.

I think I remember that. Every time I went into Wells Fargo they kept switching my accounts. I actually complained to the manager. I didn't have time to wait at the window in the bank for them to keep switching my accounts to "save" me money. I finally started telling them no, that I liked wasting money, LOL.

 

[Russ Smith]

Not a great sign for the economy but good if you have it. Etrade raised the rate on the Premium savings from 3.25 to 3.5 percent.

 

[Russ Smith]

The advantage of the Etrade one is it's liquid as DMC said plus you get 250 dollar bonus so the 4% is more like 7. A friend of mine got in it, she accidentally completed it without using the coupon code so she called Etrade and after some transferring around they agreed to honor it anyways so she'll get the 4% for 6 months plus the 250 dollars after 45 days.

I need to move money around to do it and to that I need to be in the US, Etrade was one of the accounts I had trouble accessing even with a VPN last time overseas and I'll be there for several weeks so I am hoping they still have that deal when I get back.

I also agree with DMC it's quite likely the interest rate goes up .25. We have some CD's with Wells Fargo last time we did the 7 month it had the best combination of rate and time, this time we'll do the 4 month to get the higher rate and shorter duration in case the rates go up

I've been doing these things for years it's kind of like arbitrage getting free money. Years ago I had money in a HP Credit Union account even though I didn't work for HP I was eligible because my mom and dad did. HPCU had this insane rule that they paid out a dividend I think quarterly might have been 6 months but you could transfer money in the day of the ex dividend and they would pay out the dividend on the full amount. So you could have 100 dollars in there and then on the last day put in 10K and you'd get a divident as if you had 10,100 dollars for the entire period. My sister actually worked there the ex dividend day was crazy busy with everyone coming in to deposit to get the free money

FYI the Etrade deal is now even better it's 400 dollars now not 250.

Seems like it's valid until 9-26 will be signing up as soon as I get home from Philippines in July