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Posted: 6/13/2022 6:52:51 PM EDT
Looking for something safe to park a little nest egg in.

I heard about some bond that was paying a high return.

Where are y'all parking your savings now?
Link Posted: 6/13/2022 7:17:08 PM EDT
[#1]
Got my $30K back from my so-called financial advisor and bought an I Bond for me, wife and child.  I feel much better about things now.  Actually, it was all I could think of to do.

Link Posted: 6/13/2022 7:19:58 PM EDT
[#2]
You may be referring to I-Bonds. There is a thread about them below.

Generally speaking, high yield and safe don’t play well together.
Link Posted: 6/14/2022 6:19:36 PM EDT
[#3]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By grendelbane:
You may be referring to I-Bonds. There is a thread about them below.

Generally speaking, high yield and safe don't play well together.
View Quote



Yes this is what I was thinking of.
Link Posted: 6/16/2022 11:12:12 AM EDT
[#4]
This is not investment advice, but consider a diversified ETF of preferred shares.  They are paying a little over 5% dividends right now, and the price itself should go up nicely too as the market recovers.  All depends on your timeline.

With I bonds, consider that you will be taxed on it.  Also, if I recall correctly, if you sell before it matures, then you forfeit so many months of past interest (so if you intend to only hold as long as this inflation lasts, you'll have to hold it for months past the decline in inflation to get the full benefit.)

Just my 2 cents.
Link Posted: 6/17/2022 6:46:27 PM EDT
[Last Edit: bassackwards] [#5]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By kmcd99:
This is not investment advice, but consider a diversified ETF of preferred shares.  They are paying a little over 5% dividends right now, and the price itself should go up nicely too as the market recovers.  All depends on your timeline.

With I bonds, consider that you will be taxed on it.  Also, if I recall correctly, if you sell before it matures, then you forfeit so many months of past interest (so if you intend to only hold as long as this inflation lasts, you'll have to hold it for months past the decline in inflation to get the full benefit.)

Just my 2 cents.
View Quote



I don't think that we have hit bottom yet.

I do like the sound of these preferred ETFs though. I can live off 5% return forever.

Link Posted: 6/17/2022 7:26:38 PM EDT
[#6]
Buy a politician.
Link Posted: 6/17/2022 8:23:40 PM EDT
[#7]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ACEB36TC:
Buy a politician.
View Quote



I have my eye on that too
Link Posted: 6/17/2022 8:33:51 PM EDT
[#8]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By ACEB36TC:
Buy a politician.
View Quote


while that might be a high yield strategy I am not so sure its safe.  Epstein didn't kill himself
Link Posted: 6/18/2022 8:08:58 AM EDT
[#9]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By kmcd99:
With I bonds, consider that you will be taxed on it.  Also, if I recall correctly, if you sell before it matures, then you forfeit so many months of past interest (so if you intend to only hold as long as this inflation lasts, you'll have to hold it for months past the decline in inflation to get the full benefit.)
View Quote

While true, I didn't buy I bonds as an investment, but as a safe place to park a chunk of my emergency fund where it won't get clobbered by inflation.  Even so-called "high yield" online savings accounts are still paying under 1%.
Link Posted: 6/18/2022 8:24:30 AM EDT
[Last Edit: wvar15] [#10]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By kmcd99:
This is not investment advice, but consider a diversified ETF of preferred shares.  They are paying a little over 5% dividends right now, and the price itself should go up nicely too as the market recovers.  All depends on your timeline.

With I bonds, consider that you will be taxed on it.  Also, if I recall correctly, if you sell before it matures, then you forfeit so many months of past interest (so if you intend to only hold as long as this inflation lasts, you'll have to hold it for months past the decline in inflation to get the full benefit.)

Just my 2 cents.
View Quote

I'm new to preferred shares but have been following them for a couple months. I've noticed they behave like a bond and the share price decreases as interest rates rise. That will be a problem if rates continue to rise. I think they could be a good investment if bought at the right time. I've been watching ALP-PQ which pays 5% at par value of $25. It's trading below par now. It's a preferred for Alabama Power which is part of Southern Company. From what I read they pay preferred share holders before Southern Company. I'm watching DUK-PA Duke Energy about 6% at par and LBRDP Liberty Broadband about 7% at par. For me personally the I Bond is a better deal for now. When rates stabilize, I'll look at preferred shares which will hopefully be way below par by then.

You will be taxed on the preferred dividend payments also but will need to pay state also (unless in a retirement account). The I Bond penalty is 3 months of interest. If you buy the preferred over par and it's callable, they can call it and pay you par value so you lose the difference. I personally wouldn't pay over par for any of them for that reason.
Link Posted: 6/18/2022 8:32:04 AM EDT
[#11]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bubbles:

While true, I didn't buy I bonds as an investment, but as a safe place to park a chunk of my emergency fund where it won't get clobbered by inflation.  Even so-called "high yield" online savings accounts are still paying under 1%.
View Quote
I've been buying I Bonds for close to 10 years. Even in times of low inflation they beat CDs by a good amount. I think I was getting over 3% before the inflation hit and CDs were under 1%. They used to pay a nice fixed rate also. Hopefully that returns with the fed raising rates.
Link Posted: 6/18/2022 8:38:24 AM EDT
[#12]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bubbles:

While true, I didn't buy I bonds as an investment, but as a safe place to park a chunk of my emergency fund where it won't get clobbered by inflation.  Even so-called "high yield" online savings accounts are still paying under 1%.
View Quote


That is definitely a scenario where I bonds are a very good solution.
Link Posted: 6/22/2022 4:45:10 PM EDT
[Last Edit: LastDefender] [#13]
I-Bonds are currently paying 9.62% for the next 6 months.  Rates are reset semi-annually.  They are safe (full faith and credit of the US government and all).  The issue is you are  tying the money up for a minimum of one year.  After that from years 2-5 if you withdraw the money you lose the last quarter's interest payment.  Lastly you can only invest a maximum of $10k per person per year.  There are ways of doing more such as you do $10K for you and $10K for you spouse and you each gift each other $10K so that's 40K.  You can also get up to an additional $5k back in lieu of a cash refund on you federal taxes.

The interest can be claimed at the end so this may help you on taxes if you are still working now and you plan on being in a lower tax bracket.  The interest is taxable federally but is exempt from State taxes.

Good luck in your journey.
Link Posted: 6/23/2022 8:41:32 AM EDT
[#14]
what about muni bonds?

I know the yield is not much over 3-4% but they are tax free
Link Posted: 6/23/2022 10:13:35 AM EDT
[Last Edit: LastDefender] [#15]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bassackwards:
what about muni bonds?

I know the yield is not much over 3-4% but they are tax free
View Quote



What is your current tax rate?  Are you buying a bond fund or individual bonds?  What is your time horizon for the money?  Do you understand that you can lose principal (money) in a bond fund or in individual bonds during a rising interest rate environment.  Do you understand bond duration and it's implication on your investment?  If you are buying individual bonds what are they rated by one of the major rating companies?  

Some important questions to think about.
Link Posted: 6/23/2022 10:04:27 PM EDT
[#16]
Buy very short duration corporate and treasury bonds for now. Individual only, no funds. Hold until maturity. Build a ladder so you always have fresh liquidity to reinvest as yields rise. When it looks like the Fed is getting dovish lock in the longest duration, non-callable, and best quality for the yield bonds you can find.

Call the bond desk at your investment firm. Let them know what risk/reward you can stomach and your future goals.  They will have secondary market and new issues available that are never posted online because they get bought up too fast.
Link Posted: 6/24/2022 12:44:30 AM EDT
[#17]
OP, there’s a lot of volatility but if you can hang, HEX.com has 100% uptime and pays you double digit yield depending how long you stake your coins. Worth a look. It’s done well for me. Not financial advice lol.
Link Posted: 6/24/2022 9:14:47 AM EDT
[#18]
money market acct ?
Link Posted: 6/24/2022 12:33:09 PM EDT
[#19]
Just bought a short term CD and rates are the highest I've seen in a long time. 1.85% on a 60 day CD. Sucks compared to inflation but way better than my broker's cash account.
Link Posted: 6/24/2022 1:19:38 PM EDT
[#20]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Zog117:
OP, there's a lot of volatility but if you can hang, HEX.com has 100% uptime and pays you double digit yield depending how long you stake your coins. Worth a look. It's done well for me. Not financial advice lol.
View Quote



LOL..... no


Link Posted: 6/24/2022 1:38:59 PM EDT
[#21]
iBonds are around 9% right now. That's about as safe as you can get.
Link Posted: 6/24/2022 4:39:43 PM EDT
[#22]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By imq707s:
iBonds are around 9% right now. That's about as safe as you can get.
View Quote

The problem is that they can go to 0% then they take 3 months of interest back if you try to get out when things turn to shit.

I am liking some solid preferred stock and utility company stock as mentioned above.  
Link Posted: 6/25/2022 1:05:25 PM EDT
[#23]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bassackwards:

The problem is that they can go to 0% then they take 3 months of interest back if you try to get out when things turn to shit.

I am liking some solid preferred stock and utility company stock as mentioned above.  
View Quote


I thought you said safe? What good is a utility stock at 4% dividend yield if it loses 10% in value. I have utility ETF’s in two accounts and they are down about 8%. To get a decent return you need risk or time. The iBond fits what you are looking for. They will taper down as inflation falls and then cash them in.

Something longer term? Do you have a brokerage account? CD’s are much better there than the local bank. What I see today. 3yr @ 3.45, 5yr @ 3.75 & 10yr @ 4.0. This may go up a bit more with Julys fed increase.



Link Posted: 6/26/2022 7:04:44 AM EDT
[#24]
Does OP understand that the value of the stock/fund goes down the amount of the dividend, and that he gets to pay taxes on those capital gains (some short term)? Yeah, they'll pay you that dividend, come hell or high water, but the share price goes down that much more, even if it's negative at the time. I guess if you are relying on that dividend stock for your income during a downturn, you might want a dividend stock. I don't have a lot of use for forced payouts stock values (and the taxes that go with them) at this stage in my life

Yes, iBonds variable rate (that is based on the inflation rate) COULD go to zero.  Does anyone expect the inflation rate to approach zero in the near future?

Yes, you can do muni bonds, but the interest rate offered does take into account that they are tax free.
Link Posted: 6/27/2022 11:38:36 AM EDT
[#25]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By bassackwards:

The problem is that they can go to 0% then they take 3 months of interest back if you try to get out when things turn to shit.

I am liking some solid preferred stock and utility company stock as mentioned above.  
View Quote
I've owned I Bonds for a long time and I think there's only been one brief period where the inflation rate was 0%. It doesn't bother me when that happens because prices are dropping so my I Bond money has more buying power even making 0%. I'd be fine with them making 0% for a long time if everything was going down in price. For me I Bonds are to preserve buying power not to make money. I like utility stocks a lot but they aren't safe investments. Look at the Vanguard ETF VPU. It's ranked as a 5 for risk which is the highest.
Link Posted: 6/27/2022 4:08:09 PM EDT
[Last Edit: HEATSEAKER] [#26]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DDalton:
Does OP understand that the value of the stock/fund goes down the amount of the dividend, and that he gets to pay taxes on those capital gains (some short term)? Yeah, they'll pay you that dividend, come hell or high water, but the share price goes down that much more, even if it's negative at the time. I guess if you are relying on that dividend stock for your income during a downturn, you might want a dividend stock. I don't have a lot of use for forced payouts stock values (and the taxes that go with them) at this stage in my life

Yes, iBonds variable rate (that is based on the inflation rate) COULD go to zero.  Does anyone expect the inflation rate to approach zero in the near future?

Yes, you can do muni bonds, but the interest rate offered does take into account that they are tax free.
View Quote


Good points. Dividend stocks also tend to get beat up during a rising interest rate environment because many other options for better income open up that don't come with the market crash risk or ex-dividend slump so the yield seekers move there instead.

After chasing dividend stocks and funds in the past and failing to get ahead I've come to the conclusion that it it better to keep stocks and income separate. Since this is a gun forum it is kind of like how CLP doesn't work nearly as well as a true solvent followed up by a true lubricant. Mixing them together into a "do-it-all" formula dilutes their individual properties and makes them fight against each other.
Link Posted: 7/3/2022 10:30:13 PM EDT
[#27]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By HEATSEAKER:


Good points. Dividend stocks also tend to get beat up during a rising interest rate environment because many other options for better income open up that don't come with the market crash risk or ex-dividend slump so the yield seekers move there instead.

After chasing dividend stocks and funds in the past and failing to get ahead I've come to the conclusion that it it better to keep stocks and income separate. Since this is a gun forum it is kind of like how CLP doesn't work nearly as well as a true solvent followed up by a true lubricant. Mixing them together into a "do-it-all" formula dilutes their individual properties and makes them fight against each other.
View Quote



Check out an ETF called JP Morgan Equity Premium Income (JEPI).  They generate income by selling options and investing in large caps.  Returns are usually in the high single digits to 11-12 %.  Expense ratio is about 1/3 of a percent.  The risk isn't terrible since its diversified.  It might be worth checking out and grabbing a few shares.
Link Posted: 7/3/2022 10:35:03 PM EDT
[#28]
REPO window for the win
Link Posted: 7/4/2022 9:26:33 AM EDT
[#29]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DouglasQuaid:



Check out an ETF called JP Morgan Equity Premium Income (JEPI).  They generate income by selling options and investing in large caps.  Returns are usually in the high single digits to 11-12 %.  Expense ratio is about 1/3 of a percent.  The risk isn't terrible since its diversified.  It might be worth checking out and grabbing a few shares.
View Quote


Sounds a little risky in concept but looking at the chart it actually has held its value much better in the downturn than any of my index funds PLUS it produces some nice monthly income. I might just have to throw some idle play money at it. Thank you.
Link Posted: 7/13/2022 6:59:49 AM EDT
[Last Edit: SquirrelAssassin] [#30]
What's the next best thing after I-bonds?


Utility ETFs UTF, UTG, and DNP are all paying about 7% right now, but then you also have the market risk.  I'm maxed out on I-bonds this year and need a place to park cash that yields higher than my mortgage rate of 2.25% after taxes. I'd rather park the $ and get a higher yield than pay down the principle in case of job loss.
Link Posted: 7/13/2022 7:56:46 AM EDT
[#31]
You can put $10K into an I-bond.....I think they are up around 9% right now. Not sure you are ever going to beat that if you want something "Safe".

Safe and high yield aren't really a thing.....
Link Posted: 7/13/2022 11:47:51 AM EDT
[#32]
I'm still flipping off market properties.  Probably do that until the end of the year then re-evaluate the situation
Link Posted: 7/13/2022 1:37:35 PM EDT
[#33]
Hard money lending company......pays 7-10% monthly depending on amount invested
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