What's good to invest in?
#1
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What's good to invest in?
Hello
Well I got some money back from taxes and wanted to invest it but not quite sure what. I have some stocks and mutual funds and that's about it. What do people think about bonds or CDs? Does anyone know if there are tax free investments that can be made or is there even such a thing? I'm looking to invest about 5-10K.
Well I got some money back from taxes and wanted to invest it but not quite sure what. I have some stocks and mutual funds and that's about it. What do people think about bonds or CDs? Does anyone know if there are tax free investments that can be made or is there even such a thing? I'm looking to invest about 5-10K.
#2
There are numerous Federal Tax Free Bond Mutual Funds, Money Market Funds and Tax Free Bonds [generally municipal or public works bonds]. Some are State and Federal tax free.
Since the interest rate situation [are they going to keep going up or start going down], inverted bond yield curve and the length of the current economic expansion are some cause for concern I'm a little leery of all bonds and, if I was buying them, would be inclined to buy intermediate term durations [3 to 7 years]. I would also buy them in a Mutual Fund to spread the risk a little.
Since the interest rate situation [are they going to keep going up or start going down], inverted bond yield curve and the length of the current economic expansion are some cause for concern I'm a little leery of all bonds and, if I was buying them, would be inclined to buy intermediate term durations [3 to 7 years]. I would also buy them in a Mutual Fund to spread the risk a little.
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Trapper
Awesome. So I'm wondering if I should stick with stocks. I wanted to diversified my portfolio. I've always been leary about bonds myself but wasn't sure about the tax free ones.
Thanks for the feedback.
Mark
Awesome. So I'm wondering if I should stick with stocks. I wanted to diversified my portfolio. I've always been leary about bonds myself but wasn't sure about the tax free ones.
Thanks for the feedback.
Mark
#5
Interest rates will continue to rise considering we came off of a 42 year low of interest rates....therefore, stay away from Bonds. Bonds work counter to what interest rates do. When interest rates go up, bonds go down....to put it simple. Muni bonds are good, but they are good for people looking for income or that have tax issues.
If i were you, I would stick with a money market acct paying a nice %
At that point your money is really liquid (available)
Or if you can tie it up, look into stocks or some annuities are pretty good.
Im not a big fan of most MF's due to the fees and what not. Even the ones that say "no load" there are still 12.b1 fees that come out... Hope this helps
If i were you, I would stick with a money market acct paying a nice %
At that point your money is really liquid (available)
Or if you can tie it up, look into stocks or some annuities are pretty good.
Im not a big fan of most MF's due to the fees and what not. Even the ones that say "no load" there are still 12.b1 fees that come out... Hope this helps
#6
Originally Posted by c2etalon,Feb 26 2007, 03:17 AM
Interest rates will continue to rise considering we came off of a 42 year low of interest rates...
Im not a big fan of most MF's due to the fees and what not. Even the ones that say "no load" there are still 12.b1 fees that come out
#7
I agree, I think VAs are the worst thing ever. In the 90s very popular due to the sub accts doing so well, but due the fees and poor perf. they are good for no one. Fixed Index annt. are very popluar for older individuals. You shouldnt group annuties as being bad because of one bad apple. I could say the same for MFs cause a family of MFs are no good.
As to interest rates, Greenspan just left office, we came off of historic highs of interest rates and residential building is slowing. Two things I would be wary of are bonds and REITs. I work primary with seniors, our firm works with safe money, so MFs Bonds and things like that are not popular at all. But for all you young guys that are earning money and wanting to save, a couple things we would all agree on....open up some kind of IRA, take advantage of compound growth, and max out those 401K matching situations....
As to interest rates, Greenspan just left office, we came off of historic highs of interest rates and residential building is slowing. Two things I would be wary of are bonds and REITs. I work primary with seniors, our firm works with safe money, so MFs Bonds and things like that are not popular at all. But for all you young guys that are earning money and wanting to save, a couple things we would all agree on....open up some kind of IRA, take advantage of compound growth, and max out those 401K matching situations....
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#8
MFs by law have to state what the fees are in the prospectus. But the SEC also states they dont have to state certain fees that are "variable". This stating, they dont know how much stuff they will send you in the mail (which you pay for), or how many trades the manager will make in a year. Therefore they cant tell you EXACTLY what it will cost, so you dont really know. So what you read online and in your prospectus is not accurate. Also, if you lose money, they still get paid...I dont like that concept.
I personally like Fixed index annuities. The pros, NO FEES, NONE. Your contract follows an index (S&P 500) when it goes up, you get interest, when it goes down, you dont lose anything. Your principal, and gains are all locked in.
Cons: Its not 100% liquid, make sure you get a good AAA rated company. I deal with about 5 diff. companys...All my clients, including my folks...love them. For 2006 I did my annual reviews, and on average they saw around 11% gain. Plus I can sleep at night knowing my clients wont ever have less then what they started with...not right for everyone, but good for many folks.
I personally like Fixed index annuities. The pros, NO FEES, NONE. Your contract follows an index (S&P 500) when it goes up, you get interest, when it goes down, you dont lose anything. Your principal, and gains are all locked in.
Cons: Its not 100% liquid, make sure you get a good AAA rated company. I deal with about 5 diff. companys...All my clients, including my folks...love them. For 2006 I did my annual reviews, and on average they saw around 11% gain. Plus I can sleep at night knowing my clients wont ever have less then what they started with...not right for everyone, but good for many folks.
#9
Originally Posted by c2etalon
MFs by law have to state what the fees are in the prospectus. But the SEC also states they dont have to state certain fees that are "variable"......Therefore they cant tell you EXACTLY what it will cost, so you dont really know.
Also, if you lose money, they still get paid...I dont like that concept.
I personally like Fixed index annuities. The pros, NO FEES, NONE. Your contract follows an index (S&P 500) when it goes up, you get interest, when it goes down, you dont lose anything. Your principal, and gains are all locked in.
Cons: Its not 100% liquid...
Cons: Its not 100% liquid...
Since I'm still reasonably coherent [most of the time] my philosophy is: If it's not 100% liquid [I can get in/out whenever I please as fast as I please] OR 100% safe CD's or Money Markets --and we could quibble about that one, I ain't interested.
#10
Well established or not, Im telling you what is stated in the SEC code. What you see on the net and articles are not what really comes out....fact. I majored in finance and econ and have my CSA, this is stuff you dont hear about. 12B1 fees and "expense ratio's" are what must be disclosed.
Like I said before, I dont lose my clients money. I work mostly with 50+ age group and in central PA, not many risk takers out in this neck of the woods. I deal mostly with safe money situations and one of them being Fixed Index Annts. And to respond to you, there are no fees ever. (the good ones that is) Since you seem to be respectable when it comes to knowledge this is how it works. Example. ING sells you 100K index annt. They take 80K of that and buy long term bonds (they dont care what they do, all they know is it will pay them something at all times) the other 20K they purchase options or futures in bulk at a discounted rate. (im sure you know what they are) when the S&P goes up, they exercise their options, and issue your interest, when the market goes down, they dont take anything away from you but they are still getting paid (there is their buck you were talking about)
Now that is a very simple way of putting it, but your money is not in the market ever, you just get interest based on what an index does in a year. Like I said, alot of my clients LOVE it, but for some, they need it more liquid and its not good for.
I operate from a old financial rule of thumb, RULE 100. Subtract your age from the 100 and whatever is left is the amount as a % of what you should still have at risk.
So if you are 60, that means only 40% of your money should be at risk to last you the rest of your life. And when I say risk, I mean anything that can go up or down in value ie. MF's, Stocks, Bonds, Variable Annts ect.
I wouldnt call myself biased, but Ive seen it all and I move money every day from brokers or "advisers" that sell MF's and then I go run a morningstar report on it and it says its a 2 star fund. So I get upset with guys in my profession that are a let down to all us other guys that really look out for our clients.
Also, I dont charge any money for any advise. I get paid by the companys I CHOOSE to do buisness with. The only people to deal with in our industry are INDEPENDENTS.
Like I said before, I dont lose my clients money. I work mostly with 50+ age group and in central PA, not many risk takers out in this neck of the woods. I deal mostly with safe money situations and one of them being Fixed Index Annts. And to respond to you, there are no fees ever. (the good ones that is) Since you seem to be respectable when it comes to knowledge this is how it works. Example. ING sells you 100K index annt. They take 80K of that and buy long term bonds (they dont care what they do, all they know is it will pay them something at all times) the other 20K they purchase options or futures in bulk at a discounted rate. (im sure you know what they are) when the S&P goes up, they exercise their options, and issue your interest, when the market goes down, they dont take anything away from you but they are still getting paid (there is their buck you were talking about)
Now that is a very simple way of putting it, but your money is not in the market ever, you just get interest based on what an index does in a year. Like I said, alot of my clients LOVE it, but for some, they need it more liquid and its not good for.
I operate from a old financial rule of thumb, RULE 100. Subtract your age from the 100 and whatever is left is the amount as a % of what you should still have at risk.
So if you are 60, that means only 40% of your money should be at risk to last you the rest of your life. And when I say risk, I mean anything that can go up or down in value ie. MF's, Stocks, Bonds, Variable Annts ect.
I wouldnt call myself biased, but Ive seen it all and I move money every day from brokers or "advisers" that sell MF's and then I go run a morningstar report on it and it says its a 2 star fund. So I get upset with guys in my profession that are a let down to all us other guys that really look out for our clients.
Also, I dont charge any money for any advise. I get paid by the companys I CHOOSE to do buisness with. The only people to deal with in our industry are INDEPENDENTS.