In a low interest rate environment, the long forgotten EE bonds come back as appealing again, because they offer a guarantee to double the nominal value in 20 years. That comes out to a 3.5% compound annual return if you have the fortitude to hold them for 20 years. After I wrote the previous post […]
401k Plan: From Bundled Fee To Explicit Fee
I received a notice from my employer about our 401k plan. The plan will soon start charging an administrative fee to employees’ accounts, estimated to be about $20 per quarter. Until now our plan didn’t charge any administrative fee explicitly. I was able to confirm that on my 401k plan statement. See previous post Find […]
Stable Value Fund vs Bond Fund vs CDs
CDs are better than bond funds these days even though financial advisors rarely recommend CDs. Many 401k or 403b plans include a stable value fund. How do those compare to CDs and regular bond funds? CDs are appealing for several reasons: higher yield, principal stability, and FDIC-insurance. Stable value funds share some of the same […]
Why Financial Advisors Favor Bond Funds Over CDs
CDs are a better deal than bond funds nowadays but investors often don’t realize it. You would think financial advisors would be all over it when they are living and breathing in the investment world day in and day out. However, besides Allan Roth and Larry Swedroe, I haven’t seen many financial advisors recommend CDs […]
Why Investors Don’t Realize CDs Are a Better Deal Than Bonds
The best CDs are a better deal than bond funds but investors don’t realize it. They overvalue simplicity, overpay for liquidity. and they underestimate how easy it is to buy CDs even in IRAs.
CD vs Bond Fund: A Case Study
Although interest rates dropped during the study period, favoring bond funds, buying a CD still came out ahead.
Financial Planning When You Don’t Know the Future
On my way to work I see a sign for a psychic. It’s been there forever. I wonder how a psychic stays in business. Low overhead, I guess. When I hike during the weekend, I listen to The Clark Howard Show on podcast. Clark Howard is a personal finance guru on radio and television, based […]
Invest In Long Term Bonds Now?
Back in June 2012, a reader asked in a comment on my post What to Do When Interest Rate Is So Low: What would you think about this Vanguard Bond Fund for the next couple of years of low interest rate – VWESX [Vanguard Long-Term Investment-Grade Fund]? I said I wouldn’t be comfortable with it […]
My Experience With Selling Cash-Secured Put Options
I should give an update for my experiment with selling cash-secured put options. Back in June 2012, when the percentage of my portfolio invested in stocks was close to reach a trigger point for rebalancing, I wrote this post: Sell Cash-Secured Puts: Get Paid for Your Rebalancing Commitment. The gist was that by announcing to […]
Diversify Bond Funds with CDs
Bond funds and CDs are not mutually exclusive. Considering investing in both bond funds and CDs.
Buying On Dip With 2013 IRA Contribution
It’s a new year. The IRA contribution limit has gone up by $500 to $5,500 ($6,500 if you are 50 or older). Have you made your IRA contribution for 2013 yet? I haven’t. I’m going to continue with my experiment with buying on a dip. Last year I bought Vanguard Total International Stock Index Fund […]
Bill Gross Got Lucky Again
When I looked at my 401k account for something else, I noticed this from the performance sheet: My 401k plan offers two choices for intermediate-term bond funds: PIMCO Total Return Institutional and Vanguard Total Bond Market Index Fund Institutional. As of November 30, PIMCO Total Return squarely beat Vanguard Total Bond Market Index Fund in […]