Comments on: How to maximize what your cash pays even when nothing is paying much of anything now http://jubakpicks.com/2010/03/05/how-to-maximize-what-your-cash-pays-even-when-nothing-is-paying-much-of-anything-now/ Sun, 12 Feb 2012 18:19:20 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mukerji http://jubakpicks.com/2010/03/05/how-to-maximize-what-your-cash-pays-even-when-nothing-is-paying-much-of-anything-now/comment-page-1/#comment-5126 Mukerji Tue, 09 Mar 2010 02:55:14 +0000 http://jubakpicks.com/?p=3292#comment-5126 Ed thanks for the info and discussions on AOD and EDD; kindly explain interest tax strucrures for both and what percentage of cash is being referred to when you veteran investors mention'cash'.....total newbie at this....thanks Ed thanks for the info and discussions on AOD and EDD; kindly explain interest tax strucrures for both and what percentage of cash is being referred to when you veteran investors mention’cash’…..total newbie at this….thanks

]]> By: Where to Invest for Yield Today at Curious Cat Investing and Economics Blog http://jubakpicks.com/2010/03/05/how-to-maximize-what-your-cash-pays-even-when-nothing-is-paying-much-of-anything-now/comment-page-1/#comment-5079 Where to Invest for Yield Today at Curious Cat Investing and Economics Blog Mon, 08 Mar 2010 14:37:50 +0000 http://jubakpicks.com/?p=3292#comment-5079 [...] How to maximize what your cash pays even when nothing is paying much of anything now A three month Treasury bill pays just 0.12%. A two-year note pays just 0.79%. Inflation may not be very high at an annual rate of 2.6% for headline inflation (and 1.6% minus volatile energy and food prices) but it’s enough to eat up all the interest from those investments and more. (TIPS, Treasury Inflation-Protected Securities will protect you from inflation but the yields are really low (1.43% for a 10-year TIPS at recent auction) and they only protect you from inflation and not rising interest rates. I-Bonds, a savings bond that pays an interest rate that combines a fixed component, currently 0.3%, with an inflation-adjusted variable rate, current 3.06%, offer a higher yield but since the variable rate is pegged to inflation and not interest rates, the yield on these bonds won’t necessarily go up if interest rates do. You also have to hold for at least 12 months. (After that and until you’ve held for 5 years you lose the last 3-months of interest when you sell.) [...] [...] How to maximize what your cash pays even when nothing is paying much of anything now A three month Treasury bill pays just 0.12%. A two-year note pays just 0.79%. Inflation may not be very high at an annual rate of 2.6% for headline inflation (and 1.6% minus volatile energy and food prices) but it’s enough to eat up all the interest from those investments and more. (TIPS, Treasury Inflation-Protected Securities will protect you from inflation but the yields are really low (1.43% for a 10-year TIPS at recent auction) and they only protect you from inflation and not rising interest rates. I-Bonds, a savings bond that pays an interest rate that combines a fixed component, currently 0.3%, with an inflation-adjusted variable rate, current 3.06%, offer a higher yield but since the variable rate is pegged to inflation and not interest rates, the yield on these bonds won’t necessarily go up if interest rates do. You also have to hold for at least 12 months. (After that and until you’ve held for 5 years you lose the last 3-months of interest when you sell.) [...]

]]> By: EdMcGon http://jubakpicks.com/2010/03/05/how-to-maximize-what-your-cash-pays-even-when-nothing-is-paying-much-of-anything-now/comment-page-1/#comment-5078 EdMcGon Mon, 08 Mar 2010 14:31:16 +0000 http://jubakpicks.com/?p=3292#comment-5078 To those of you who asked about AOD... The reason to own it is simple: the dividend. As Jim pointed out, it's good to have a place to park your money for a good return, as opposed to sitting on cash. I do not YET look at it as a long term investment, at least until they clean up their NAV. However, where else will you get a 16% DY? I'll take it until I need the money for a better investment. At the moment, there are too many overpriced stocks. To those of you who asked about AOD…

The reason to own it is simple: the dividend. As Jim pointed out, it’s good to have a place to park your money for a good return, as opposed to sitting on cash.

I do not YET look at it as a long term investment, at least until they clean up their NAV. However, where else will you get a 16% DY? I’ll take it until I need the money for a better investment. At the moment, there are too many overpriced stocks.

]]> By: Jim Jubak http://jubakpicks.com/2010/03/05/how-to-maximize-what-your-cash-pays-even-when-nothing-is-paying-much-of-anything-now/comment-page-1/#comment-5074 Jim Jubak Mon, 08 Mar 2010 13:55:20 +0000 http://jubakpicks.com/?p=3292#comment-5074 perrytime, why did I say that about I-bonds? Simple. My msitake. The situation is as you describe it. Yo on ly have to lock up your money for a year and for the first five years you forfit your lst 3-months interest when you sell. The biggest dsarwback with these bonds for msny investors is that you are limited to sa $5,000 annual purchase. I've made the correction and I regret the error. Thanks for the catch and the comment. perrytime, why did I say that about I-bonds? Simple. My msitake. The situation is as you describe it. Yo on ly have to lock up your money for a year and for the first five years you forfit your lst 3-months interest when you sell. The biggest dsarwback with these bonds for msny investors is that you are limited to sa $5,000 annual purchase. I’ve made the correction and I regret the error. Thanks for the catch and the comment.

]]> By: Jim Jubak http://jubakpicks.com/2010/03/05/how-to-maximize-what-your-cash-pays-even-when-nothing-is-paying-much-of-anything-now/comment-page-1/#comment-5073 Jim Jubak Mon, 08 Mar 2010 13:52:11 +0000 http://jubakpicks.com/?p=3292#comment-5073 YX, yes that's Shanghai YX, yes that’s Shanghai

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