On 2007-01-29 01:59:29 -0800, Davey Boy <mikioiTAKEOUT[at]gte.net> said:

- quote -

I would put my money into T-Bills since they are state-tax exempt so
most times you wind up with a higher effective rate than a CD. Of
course if you don't pay state tax the advantage might not be there.

-Scott

On Jan 29, 4:59 am, Davey Boy <mikioiTAKE...[at]gte.net> wrote:
- quote -

FWIW up here bank rates are really low, but I did find a 4% savings
account ... not bad considering the cash is available ... for up here
that is. So that's where my cash is building for now until I figure
what to invest in. I have a 1yr GIC maturing this month, and that's
where it's going. There are brokers who will find you high paying
saving accounts at no cost. I suggest you at least phone around and
put yer cash into one of those while you think the situation over.

On Jan 29, 4:22 pm, "Andrew Koenig" <a...[at]acm.org> wrote:
- quote -

My own thought is the OP should:

- split the money into 2 amounts, either 100k and 50k or 2 75ks, and
invest them at different FDIC insured banks.

Invest in a ladder: 6 months, 12 months, 18 months, 2 years, roughly
1/4 of the money in each. If interest rates rise (or fall) there is a
degree of hedging in the ladder.

Any other strategy has a higher risk associated with it

On Jan 29, 2:44 pm, "FranksPlace2" <FranksPla...[at]gmail.com> wrote:
- quote -

Leverage increases the risk level.

On Jan 29, 12:27 pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:
- quote -

One *important* point is that buying a single bond exposes the
investor to credit risk (unless the investor buys a US Treasury bond
-- note a treasury, not a Fannie Mae or Freddie Mac or a municipal
bond, etc.).

The world is full of blue chip companies, highly rated by Moody's,
Standard and Poors, that then went bust. Or became the subject of
Leveraged Buy Outs (one of the world's leading private equity
investors has predicted that we will see a $100bn LBO in the next
couple of years-- beating the previous record, the $70bn RJR_Nabisco
one), which will demolish their credit rating.

You could lose the whole lot on the off chance of buying into another
Enron or Worldcom.

Yield curve inversion comes into play here. We are in a rare situation
where short term yields are higher than those of long-term yields.
That usually does not bode well for the economy (usually is a
historical term and, of course, does not guarantee future
performance). Yield curve inversion is also the reason that money
market rates are currently comparable, if not superior, to bonds and
long-term CDs.

For better or worse, yield curves do not stay inverted for long. The
market has a funny way of attempting to correct itself (sometimes our
gov't "motivates" it along though). You should consider the
possibility that money market rates may not sustain themselves and you
will need to make investment adjustments in the coming years.

On Jan 29, 1:59 am, Davey Boy <mikioiTAKE...[at]gte.net> wrote:
- quote -


So let me think. You "cashed out", meaning you extended the life of
your mortgage to get this money. So now you owe more and for longer
periods of time to your mortgage company, not to mention the fees you
paid to refi. This is so you get money to go to school? Me
personally I would get a student loan instead.

- quote -

On Mon, 29 Jan 2007 10:22:52 -0600, "Andrew Koenig" <ark[at]acm.orgwrote:

- quote -

Well put. Absent liquidity and quality issues, the choice between
money market accounts and CDs/bonds is a bet on interest rates.

In general those who think rates will strengthen over their time
horizon should look at something that has a floating interest rate -
like money market instruments. Conversely, those who think rates will
stay about the same or decline should look at products that lock in
the current rate - like CDs (and bonds.)


-HW "Skip" Weldon
Columbia, SC

"Davey Boy" <mikioiTAKEOUT[at]gte.net> wrote in message
news:Xns98C6AA1F7EA07mikioigtenet[at]216.196.97.142...

- quote -

Money-market mutual funds are currently paying around 5% as well. They have
the disadvantage over CDs that they're not FDIC-insured (though only the
first $100K at any given bank is insured anyway), and the advantage that you
can withdraw any amount of the money at any time. Also, the interest rate
for money-market funds is variable, which is an advantage over CDs if rates
go up, and a disadvantage if rates go down.

Ya pays yer money and ya takes your choice.

Bonds took a big hit last week and could should economic
conditions suddenly change. They are best mixed with
stocks because they somewhat hedge each other.

On Jan 29, 3:59 am, Davey Boy <mikioiTAKE...[at]gte.net> wrote:
I'm wondering if there's a better
- quote -

I'll give you a different answer. Consider a closed end (leveraged)
municipal bond fund such as those offered by Nuveen. They are
currently paying 5% + tax free and are 100% liquid. Volatility isn't
bad, in my opinion.

Frank

In article <Xns98C6AA1F7EA07mikioigtenet[at]216.196.97.142> ,
Davey Boy <mikioiTAKEOUT[at]gte.net> wrote:

- quote -

The question is if you are willing to take on additional risk?
For example, you could put it in an index mutual fund, and maybe
see it go up 20%. Or down 30%. That is the problem. If you
need the money that quickly, you cannot ride out the cycles.

Another option is to look for brokered CD's, or even pick up
a bond that matures on the date that you need the money. You
may be able to get higher rates by taking on something that
is lower in quality. That might get you a few more points,
but it might also take a loss.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

Hi All!

My wife & I have refi'd and will be coming into some cash ($100K-$150K).
Where should we put the money for the short-term (1 to 2 yrs)? One of us
is going back to school to change careers and will be full-time in the
program so that's why we cashed out... I'm wondering if there's a better
place to park the money than in a CD (at least $120K)? Our bank currently
offers the following rates for CDs:

5.00% - 3 months
5.30% - 6 months
4.85% - 1 year to 1 & 1/2 year

I've read about placing it in CDs by staggering the amounts you put in...
Any other suggestions? ...

Thanks in advance!

Dave