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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.
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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. |
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Posted: 6/14/2022 6:19:36 PM EDT
[#3]
Quote HistoryQuoted: 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. Yes this is what I was thinking of. |
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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. |
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Posted: 6/17/2022 6:46:27 PM EDT
[#5]
Quote HistoryQuoted: 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. 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. |
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Posted: 6/17/2022 7:26:38 PM EDT
[#6]
Buy a politician.
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Posted: 6/17/2022 8:23:40 PM EDT
[#7]
Quote HistoryQuoted: Buy a politician. I have my eye on that too 
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Posted: 6/17/2022 8:33:51 PM EDT
[#8]
Quote HistoryQuoted: Buy a politician. while that might be a high yield strategy I am not so sure its safe. Epstein didn't kill himself |
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Posted: 6/18/2022 8:08:58 AM EDT
[#9]
Quote HistoryQuoted: 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.) 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%. |
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Posted: 6/18/2022 8:24:30 AM EDT
[#10]
Quote HistoryQuoted: 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. 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. |
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Posted: 6/18/2022 8:32:04 AM EDT
[#11]
Quote HistoryQuoted: 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%. |
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Posted: 6/18/2022 8:38:24 AM EDT
[#12]
Quote HistoryQuoted: 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%. That is definitely a scenario where I bonds are a very good solution. |
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Posted: 6/22/2022 4:45:10 PM EDT
[#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. |
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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 |
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Posted: 6/23/2022 10:13:35 AM EDT
[#15]
Quote HistoryQuoted: what about muni bonds? I know the yield is not much over 3-4% but they are tax free 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. |
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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. |
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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.
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Posted: 6/24/2022 9:14:47 AM EDT
[#18]
money market acct ?
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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.
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Posted: 6/24/2022 1:19:38 PM EDT
[#20]
Quote HistoryQuoted: 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. LOL..... no  |
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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.
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Posted: 6/24/2022 4:39:43 PM EDT
[#22]
Quote HistoryQuoted: iBonds are around 9% right now. That's about as safe as you can get. 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. |
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Posted: 6/25/2022 1:05:25 PM EDT
[#23]
Quote HistoryQuoted: 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. 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. |
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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. |
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Posted: 6/27/2022 11:38:36 AM EDT
[#25]
Quote HistoryQuoted: 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. |
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Posted: 6/27/2022 4:08:09 PM EDT
[#26]
Quote HistoryQuoted: 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. 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. |
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Posted: 7/3/2022 10:30:13 PM EDT
[#27]
Quote HistoryQuoted: 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. 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. |
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Posted: 7/3/2022 10:35:03 PM EDT
[#28]
REPO window for the win
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Posted: 7/4/2022 9:26:33 AM EDT
[#29]
Quote HistoryQuoted: 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. 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. |
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Posted: 7/13/2022 6:59:49 AM EDT
[#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. |
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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..... |
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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
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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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Posted: 10/26/2022 10:26:04 AM EDT
[#34]
If you want I-bonds at the 9.12% interest rate and you haven't maxed out your annual purchase yet, get your order in by Friday.
Looks like the rate for the following six months is predicted to be 6.48%. |
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Posted: 10/26/2022 2:47:33 PM EDT
[#35]
Quote HistoryQuoted: Yes this is what I was thinking of. Quote HistoryQuoted: Quoted: 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. Yes this is what I was thinking of. I'm not saying I-Bonds are dumb but make sure you understand the rules. 1) They pay ZERO premium currently above and beyond the component that tracks inflation rates which means you'll never make an inflation adjusted return greater than 0% unless that premium goes up. Looking back at the last 10 years, I don't see where that premium has ever been higher than 0.5%. 2) You pay tax you on the interest earned which takes your inflation adjusted return of 0% and makes it negative 3) If you pull out out early there are penalties in the form of lost interest further exacerbating your losses They really only make sense as a place to put money that you don't have any better ideas for at the moment and you are just trying to stop the bleeding as much as possible until you come up with something better. They are 100% valid for that purpose. Pay less attention to the current rates and pay more attention to the actual design of this investment. If it still makes sense for your situation after you understand how they work then by all means buy I-Bonds. I'm not trying to shit on them but rather encourage people to do their homework because I get the impression that lots of people really don't understand the variable nature of what they are buying or how that variable interest rate is constructed. |
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