MATH . . . $20,000 in a 5.25 CD = $1,050 [20,000 * .0525] . . . $20,000 in a $20 bank stock (1,000 shares) that pays $0.92 Dividend per share a year = $920 . . . and if that stock goes up $2 in price that is $2,000 in Capital Gain. [1,000 shares * 2] STRATEGY . . . Take the CD if you can't afford to lose what you already have , , , take the Dividend if you have extra cash to invest . . . BONUS , if the stock price goes up after a year (you took the Dividend) SELL and your risk is rewarded (hopefully) with Capital Gain.
Non-Callable CD's are great when you don't have 20 years to watch the markets go up and down. I have 5 CD's and 2 fixed index annuities.. Plenty happy with those when we continue to see an unstable market.
So high yields are ephemeral? How about stock prices? Lol. A desperately indebted government must offer attractive yields or deal with high inflation. Stocks are at nose bleed levels. The chances of a 50% plus crash is very real. Not so much with short duration high quality fixed income. I will only buy equities based on fundamentals at bargain prices. That is prudent risk management.
This past year I took advantage of hefty CD yields. Last December took lump sum pension and put 90% in monthly laddered CD's. Did lock in a couple 18 month CD's @5.50%, and one 2 year CD @ 5.40%. Rate yields lately been dropping like a rock. Basically 60/40 split, and will nibble back into solid dividend stocks in 2024.
Much deserved shout out from Clark Howard (podcast) to Christine Benz this past week.
Wow, no bot comments yet introducing some non-existent advisors. A small miracle
MATH . . . $20,000 in a 5.25 CD = $1,050 [20,000 * .0525] . . . $20,000 in a $20 bank stock (1,000 shares) that pays $0.92 Dividend per share a year = $920 . . . and if that stock goes up $2 in price that is $2,000 in Capital Gain. [1,000 shares * 2]
STRATEGY . . . Take the CD if you can't afford to lose what you already have , , , take the Dividend if you have extra cash to invest . . . BONUS , if the stock price goes up after a year (you took the Dividend) SELL and your risk is rewarded (hopefully) with Capital Gain.
Non-Callable CD's are great when you don't have 20 years to watch the markets go up and down. I have 5 CD's and 2 fixed index annuities.. Plenty happy with those when we continue to see an unstable market.
So high yields are ephemeral? How about stock prices? Lol. A desperately indebted government must offer attractive yields or deal with high inflation. Stocks are at nose bleed levels. The chances of a 50% plus crash is very real. Not so much with short duration high quality fixed income. I will only buy equities based on fundamentals at bargain prices. That is prudent risk management.
This past year I took advantage of hefty CD yields. Last December took lump sum pension and put 90% in monthly laddered CD's. Did lock in a couple 18 month CD's @5.50%, and one 2 year CD @ 5.40%. Rate yields lately been dropping like a rock. Basically 60/40 split, and will nibble back into solid dividend stocks in 2024.
You never talk or discuss MYGA's with binds or CD's