My parents are thinking about throwing money into a CD but I'm not sure it's a...

Illusionz
Illusionz

My parents are thinking about throwing money into a CD but I'm not sure it's a good idea. Would it be better for them to dump their money into something like Fidelity or Vanguard?

Garbage Can Lid
Garbage Can Lid

we can definitely make recommendations based off this amount of information

Harmless_Venom
Harmless_Venom

Why? Just a quick glance and most pay less than 2%...better off just buying some random bluechip

Sir_Gallonhead
Sir_Gallonhead

Having money in a CD is not unreasonable, especially if you are nearing retirement.

girlDog
girlDog

what else do you want to know? it's about 40k, my parents don't know much of anything about investments and they want to move some of their money around so it doesn't sit in a bank account

why what? buy a CD? i don't know. the best offer they got was 1.4% on a 18 month deposit so I'm trying to get some ideas.

Evil_kitten
Evil_kitten

As with anything, timing is the key. When you get in and when you get out.
If it was me: I'd get an account w/either Edward Jones or Vanguard, then buy a municipal bond like the ones they issue for infrastructure(roads & bridges). That's how Suze Ormann made her money(despite what she claims during her brow-beating lectures).
Get one of their college kids to calculate how many years you'll need to keep it, etc. Some of those bonds expire too, so be ready to buy some more.
Bonds: upside is reliable income. Downside is no major profit sweep when times are good.

happy_sad
happy_sad

gr8 b8 m8 8/8

5mileys
5mileys

forgot to give the reason: Municipal bonds are TAX FREE

New_Cliche
New_Cliche

US unemployment rate and its 12ma are good a indicator of long term market change, looks to me like it will change soon. Investing now is not a good idea, if you do studies show bulk of returns come on days T-3 to T+3 around turn of the month so only have exposure then.

Methnerd
Methnerd

im in highschool but i think cd's are fairly secure, a low % but secure. I do not about the correlations on it. right now is not good to start a long position on a vangaurd account.

they;re compsulvie over traders that are greedy right now and you need to tell them that.

tell them to get puts while big name companies slowly plummel the trump eupohoria. then you can start a long position on vanguard

SniperWish
SniperWish

That may have been what is true historically, but I would not expect that to continue indefinitely.

CodeBuns
CodeBuns

take tax free status from munis
suddenly they become quite literally worthless

wouldn't happen in a millin years

whereismyname
whereismyname

I wouldn't put it past the government. It is only a historical oversight why they are not taxed now.

w8t4u
w8t4u

see
suddenly they become quite literally worthless

You don't understand how tax incentives work and how even the federal government knows that maxing buying their bonds tax-tree facilitates anyone even bothering to buy their bonds, that's fine, but don't reply to me like you're educated in any way in the sphere kiddo

yes, and the government could one day start airdropping boxes of orangutans into suburbs, but it won't happen

iluvmen
iluvmen

what are their ages
when do they want to retire
what additional goals to they have
what debts do they have
jesus christ

Edward Jones
don't take ANY of this person's advice

Emberburn
Emberburn

People thought the same thing about the deduction of personal interest and then that went away.

You can ignore that it may happen, but eventually it will because it is too large of a pool of income not to be taxed.

AwesomeTucker
AwesomeTucker

mom in her mid 50s and dad in his early 60s and retiring at 65. only goals are to live comfortably as they have and set up some sort of nest egg for me. no debts but they're also not looking for anything that carries a high amount of risk.

Burnblaze
Burnblaze

CDs are on the extremely low end of the risk spectrum. It's possible it's the right choice for them.

This guy asks a lot of the right questions.

-- time frame is critical
-- risk tolerance is critical

If this was very long-term money, you might be right in urging them to go up a little bit in risk. But even then, if they are the sort to get panicky at market fluctuations, it still might be better to stay at the low end of the risk spectrum.

lostmypassword
lostmypassword

Dropping boxes of orangutans into suburbs
NYC's Mayor Deblasio is doing just that..

idontknow
idontknow

What are they stupid? They should be splitting it 50/50 POSW/PIVX

takes2long
takes2long

If your parents simply want a low-risk means of generating retirement income, go to treasury.gov and buy long-term treasuries. The return will be much better than a CD and treasuries are one of the safest investments on the planet.

viagrandad
viagrandad

TIPS
Municipal Bonds
Low Cost Short Term Index Bond Funds
CD Ladders

They shouldn't concern themselves with "growing" your nest egg until they're dead and you've already inherited it.

massdebater
massdebater

Also, consider an annuity
there is plenty of literature on the subject of asset allocation in retirement should they need it

lostmypassword
lostmypassword

dump everything into AUPH and wait till 2020, 300-400% return for sure
de-risked pharma with a best in class drug in pipeline, Roche, Novartis & Merck gonna bid for it im very certain

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