Investing, Money Markets, CD's etc

[tikiyaki]

I just sold my house and made ok money off it. I know there are lots of 5%savings accounts right now, but that rate is not fixed and can change at anytime. I'm looking for something to put a chunk of my money in to earn decent interest without tying it up for too long. Anyone know of any good maney market type accounts to put money into ?

[Adri]

Re: Investing, Money Markets, CD's etc

You might consider consulting a financial planner. A good one would be up to date on possible investment opportunities and can discuss the risks and upside with you and can help you plan overall.

[tutusue]

Re: Investing, Money Markets, CD's etc

Tikiyaki...I asked my financial planner about Index Funds based on an article I read here and here. FP stated the following:

Index funds are fine. They are designed to mirror the performance of the
segment of the market that the index represents - not to out perform or
under perform. They are normally low cost and used by investors who self
direct there own investments but do not have a great deal investment
expertise or time to follow the market.

Google will also net you a lot of results. My only question is how is buying timed! I'm currently playing it safe at Emigrant.com but am seriously entertaining the thought of Index Funds.

[808shooter]

Re: Investing, Money Markets, CD's etc

I just sold my house and made ok money off it. I know there are lots of 5%savings accounts right now, but that rate is not fixed and can change at anytime. I'm looking for something to put a chunk of my money in to earn decent interest without tying it up for too long. Anyone know of any good maney market type accounts to put money into ?

My advice is to keep it in those savings accounts at 5%. There is zero risk and if you're going to need the money for something in the near future like getting back into real estate and buying another primary residence, it's best not to be too risky.

I believe bank of Hawaii has some kind of sweep account where it's like a checking account where you earn around 5% but have access to it at anytime. Your balance requirement is maybe 40K or so but the real benefit is its liquidity and protection from the FDIC.

Even if you could earn another couple of points but ran the risk of losing principle, it's not worth losing a big chuck of your down. I'd say you're taking a big enough of a risk sitting out the real estate market... Unless you have a real good reason on why you sold and didn't buy something else. You're probably ok but if there is another small spurt of appreciation over the next year or two you could end up being priced out of your own home. That would be kind of sucky.

Be careful of advice from investment advisors. They are commissioned salespeople most of the time and it's tough for them to recommend something to you without balancing what's a little good for them.

I was a series seven licenced broker at one time. I didn't like that daily ethical question of what's best for my client and maybe what's pretty good for my client vs what's good for me. After all we all work for a living. I got out after two years and only work b2b sales now. I sleep better.

edit: oh yeah, don't get sucked into a bond fund. it may seem more garanz but interest rate risk could affect your principle in a big way. Most folks have no clue what interest rate risk is an the difference between short and long term rates are. If you want specific advice, I'd be happy to give you my honest assessment. Again I'm not a professional but I was "licensed" and considered one a few years back.

[GeckoGeek]

Re: Investing, Money Markets, CD's etc

I don't have any direct answers, but I would recommend something safe. Safe as in insured. To that end, you might need to watch how much you put in any one institution as I think the insurance is only good to $100,000 per person.

The other question is how liquid do you need your money? CDs are good, but you need to leave the money there 6mo or 1year or whatever the term is.

Just keep in mind the rule: The greater the risk, the higher the interest rate. If you see a high rate that looks safe, then you probably aren't understanding the risk.

One thought: Take the bulk of the money in a very safe place and then take a small portion and invest it in reasonable safe place that will give a better return. That way you can increase your return without risking the whole amount.

[tikiyaki]

Re: Investing, Money Markets, CD's etc

Thanx guys...I guess I have alot of choices. Gonna take some deliberation, I guess.

As soon as all the moving in madness is over, I'm gonna take a closer look.