Lux Investing
With CD rates low, what are my other options for investing 5K?
I invested a few thousand a year ago in a 6-month CD around 5%. 6 months later I reinvested it at a lower 4%. It's obvious the rates are constantly dropping and the average is around 3%. My CD is going to mature at the end of the month and I want to add a few more thousand to it and drop it into a safe investment again. I'd just like a better return. Should I just bite the low return for another 6 months and hope the rates improve or try something new. Any suggestions?
Public Comments
- There are many conservative investments for cd alternative savings, but you need to decide what to do in the course of your overall financial plan. You can put your money into conservative blue-chip equity funds (funds that invest in large, well known best of the best companies,ie Exxon, Microsoft, WalMart, Home Depot, GM, McDonalds, etc...). Also, you can look into low yield (ie low risk) bond funds. Lastly, look into Government Bonds. They are guaranteed by the federal government, therefore there is no risk of default. They are all safe investments. If you won't be needing the money for awhile, then look into fixed annuities. They are also a great alternative to cds. Best of luck to you.
- Invest in forex. With a high leverage you make so much money.
- Hi, Luna, What do you intend to do with the money you've saved? If it's for your retirement, you should get it into an IRA. If you're going to spend it in the next 5 years (maybe you're saving for a downpayment on a house, for example), you should keep the money out of the stock and bond markets, because your money can be worth less when in the future than it is now. CDs don't return a lot, but they maintain the amount of their principal. Many many stock investors in this century wish they still had 100% of their original principal. If you are saving for long run, then I personally recommend dividend-paying stocks and Treasury Inflation Protection Securities (TIPS). Both will grow as time goes by, protecting you from inflation. TIPS do have a sneaky tax problem, so you should buy them only within an IRA or other retirement account, or buy the exchange traded fund TIP. If you want to go with some stocks that pay dividends, you can get bargains right now in real estate investment trusts. best, Rick
