3% 5 Year CD @ Mercantil Bank

KingsX said:
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Ironic how topics about CDs always end up off topic discussing the stock market.
Maybe it's because investing in a bank CD is so simple [with no risk of principle
and no buying, selling or management fees] while stocks are more complicated.

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I have no problem with stock discussions. I own etf stock funds as well. But it would be nice to be able to discuss cd rates w/o having to hear about how nuts we are having money allocated to the sector.
 

it is never nuts to buy cd's . but when you have people talking about how they pretty much only live off of cd's there are many who take that to mean they can too and that can be a very risky move for them . they do not understand the math behind making a decision about how to allocate based on amount saved and draw . they only know you have people saying negative things about equities and they only uses cd's .

so it is important i think in these forums to understand when certain things are okay and when they are not so everyone gets more knowledgeable if they want to learn. ..
 
Point: CDs are not investing. Investing includes risk and compared to nonguaranteed avenues CD's are in a category separated from Wall Street. This is part of the strategy of age/risk factor. The older we get the less risk we take. I recall during the last downturn when retirees 401K plans were tanking everyone saying "elderly people had no business being in stocks." So there should be no argument on this subject. Have CDs as a backup in case of a tumble and have a conservative stock portfolio to ease the landing because it is not only how bad the market falls but for the seniors it is how long does it take to recoup our losses. We have to always factor in our life expectancy. I am not investing to increase my wealth but to try to stay with or slightly ahead of inflation.
 

there lots of arguments on the subject as far as retirees having equities and what is needed but this is not the thread for it . the big risk depending on draw and savings is in not having enough of an allocation to them to safely generate what they need and you can take that to the bank . being to conservative has destroyed more retirements then any stock market downturn did . it is always been poor investor behavior and not markets that have lost money for retirees ..even those who retired in 2008 are doing just fine .
 
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mathjak107 said:
the answer is because a penny saved may be a penny earned but it will always be a penny. actually less after inflation and taxes , without good compounding . so for most of us working stiff's the only way to ever get enough saved is by taking the little bits we do manage to save and letting one of the most powerful forces , good compounding do the heavy lifting . so perhaps for some ,their retirement draw rate is low enough that they can meet their obligations and live off cd's . but for most of us the risks of drawing anything above 2-2.50% is very high . so yes cd's can play a roll for short term money but it is important for all to understand that if they are unable to save the amount of money needed to generate the amount of money needed they can not go mostly cd's when others talk about how they do it .

you need to either save a whole lot more or live on a lot less than you could simply using a balanced portfolio .
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This is a CD topic and like all CD topics I've witnessed here,
it has been usurped by posters who berate CDs.

We are all intelligent adults here. We make our own choices
based on our own preferences and needs. No need to berate
those who choose CDs.

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For me, CD's are a non-risk addition to my savings. I have a fair amount in an Ally account that is 1.6%, which is good nowadays for a plain ole savings account. However, when I read the posting yesterday about a CD accumulating 5% (I think) over 5 years, I started looking around for CD rates. I didn't want to tie up my $$ for 5 years so I opted for a 2 year CD @ 2.35% at Ally. I will ladder another CD for maybe 18 months (I forget what the interest is).

Since I'm 71 and don't plan on trying to strike it rich with anything, especially with stocks or mutual's or bonds that I don't understand how it all works, I'm just trying to do the best I can with what little I have and earn a little more interest. Who knows what the future will bring, so every $$ counts. :)
 
fmdog44 said:
Why does this forum have a sponsor claiming 9.6 annuity returns like "info.annuityallliance.com"?
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I have not seen the adv. but it may be a little bit of smoke and mirrors.

Some annuities advertise high guaranteed growth rates but they only allow a much lower capped withdrawal rate so you never get the benefit.

I would listen to the sales pitch but remain skeptical, if it sounds too good to be true it probably is.
 
KingsX said:
This is a CD topic and like all CD topics I've witnessed here,
it has been usurped by posters who berate CDs.

We are all intelligent adults here. We make our own choices
based on our own preferences and needs. No need to berate
those who choose CDs.

.
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i would like to see the posts that berate buying cd's ????????????????? i don't see not one in this thread . i see facts , and i see opinions on rates .
 
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Maybe another wild stock market ride will deter you...
although it didn't the last time you trashed a CD topic.

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stop with your silly answers . that is total nonsense as a reply and i still challenge you to show where buying cd's was berated ??????? the only thing i see is the reverse - a lot of nonsensical fear mongering trying to portray equities as some villain . facts show you are quite wrong .
 
You should have both safe money and invested money and if you are 100% in stocks and bonds you are stupid. If you are 100% in safe money do not expect growth. It cannot be said nay clearer.
 
you do not need much cash , bonds work fine as safe money . just match the duration to the time frame you need the money . i keep 4% cash which shrinks less and less through the year as it is spent down . then the bonds and stocks are rebalanced for the following year . more cash than that is not needed unless there is a specific use. the combination of assorted bond time frames and a bit of cash works fine and always has .

the allure of these cash buckets with years of cash have been found to accomplish nothing that simply rebalancing bonds and stocks wouldn't do .except bonds tend to work better over time than holding years of cash. .


https://www.kitces.com/blog/are-retirement-bucket-strategies-an-asset-allocation-mirage/
 
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I was able to free up extra money to put into another 5 year 3.10% CD with First Guaranty Bank.
[when you have a FG checking account, they give you an extra .10 bump up on the rate.]

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I just dumped 25% of my retirement money into a Ladder of CDs with Synchrony Bank. I also opened up two mutural funds with a 60/40 bond to stock split but since I do not need this money for 10 years I am waiting for the next bull market and then buying stock at cheap prices. For now, CDs and a high yield savings account work for me. I have tried to get my sister to use on online bank for her CDs but she wants to stay with her brick and mortar bank and get a little over 1% on a 5 year CD when I am getting 2.85%.
 
Vinny said:
I just dumped 25% of my retirement money into a Ladder of CDs with Synchrony Bank. I also opened up two mutural funds with a 60/40 bond to stock split but since I do not need this money for 10 years I am waiting for the next bull market and then buying stock at cheap prices. For now, CDs and a high yield savings account work for me. I have tried to get my sister to use on online bank for her CDs but she wants to stay with her brick and mortar bank and get a little over 1% on a 5 year CD when I am getting 2.85%.
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I caution anyone trying to time bull or bear markets because you never know when they will start and end. Dollar cost averaging is something you may want to examine. Getting 1%+ on a five year CD s actually losing money as re all rates below inflation. There are savings accounts with higher yields.
 
The utility I bought 1000 shares of on 5/17 @$26.75 just went past $28.75 On July 2 @ .41 a share with no reduction in the capital gain the dividend will probably be about 14 share increase. Granted 14 shares is a tiny amount bur as I pointed out this purchase is a nest egg for our sons.

If there was no compounding and the dividend never increased a straight 56 shares x about 20 years until they inherit the original purchase amount will have doubled. But stocks rise and fall by then it's possible for the utility to have increased in capital value as it has done in past years. And yes decrease is the other potential.

Either way a nice gift for when that time comes. The projection is for the dividend to increase by 4% each year for the next 10 years. Projections and reality often differ.
 
mathjak107 said:
what utility is it ?
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PPL Corporation is a multinational investor-owned utility company, servicing the UK and parts of the United States. PPL Electric Utilities delivers electricity to residents and businesses in eastern and central Pennsylvania.
https://www.consumeraffairs.com/utilities/pennsylvania-electricity-companies/




$28.79* 0.53 up 1.88%
*Delayed - data as of Jun. 25, 2018 -


https://www.nasdaq.com/symbol/ppl


1 Year Target 33
Today's High / Low $ 28.87 / $ 28.27
Share Volume 10,192,733
90 Day Avg. Daily Volume 7,482,580
Previous Close $ 28.26
52 Week High / Low $ 39.90 / $ 25.30
Market Cap 21,946,775,489
P/E Ratio 16.94
Forward P/E (1y) 12.29
Earnings Per Share (EPS) $ 1.70
Annualized Dividend $ 1.64
Ex Dividend Date 6/7/2018
Dividend Payment Date 7/2/2018
Current Yield 5.80 %
Beta 0.06

This particular stock my wife has in her portfolio closing in on 40,000 shares. The way our expenses and lifestyle are the dividend alone will be more than enough to take care of her needs & wants after I croak. My accounts will transfer to her automatically so if she doesn't blow the money on a boyfriend our kids will do well in the inheritance department.
 
phew , PPL lost 22% the last year including the dividends . not good at all for anyone holding it since last year . . in fact if you owned it the last 10 years you lost about 1% a year even with dividends included.

a dividend paid out out without matching appreciation just drives a stock price lower and lower each payout . hope you have better luck , nothing i would entertain owning . these poor investors who chase dividends and think utilities are safe got hammered in it .


over the last 10 years an investor would have had a bigger balance if they put the money under a mattress and just pulled the amount of the dividend out since owning the stock actually lost 1% on average a year more than the dividend paid .


i can't see owning this over an s&p 500 fund , you can't even say it is safer after it lost 22% in one year .


all returns include the dividends


------------ppl-------- -s&p 500


1yr-- - minus 22%-------- plus 13.90%


3 yr--- 4.13%--------- plus 11%


5yr ---5.96% ----------plus 13.54


10yr---- minus 1.44------ plus 9.73


15 ----year 6.03----------- plus 9.21
 
mathjak107 said:
phew , PPL lost 22% the last year including the dividends . not good at all for anyone holding it since last year . . in fact if you owned it the last 10 years you lost about 1% a year even with dividends included.

a dividend paid out out without matching appreciation just drives a stock price lower and lower each payout . hope you have better luck , nothing i would entertain owning . these poor investors who chase dividends and think utilities are safe got hammered in it .


over the last 10 years an investor would have had a bigger balance if they put the money under a mattress and just pulled the amount of the dividend out since owning the stock actually lost 1% on average a year more than the dividend paid .


i can't see owning this over an s&p 500 fund , you can't even say it is safer after it lost 22% in one year .


all returns include the dividends


------------ppl-------- -s&p 500


1yr-- - minus 22%-------- plus 13.90%


3 yr--- 4.13%--------- plus 11%


5yr ---5.96% ----------plus 13.54


10yr---- minus 1.44------ plus 9.73


15 ----year 6.03----------- plus 9.21
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Probably missing is the understanding that we live a simple life and don't depend on that stock alone. We are building a way to help assure the well being of our kids. It would take up more space and be useless to explain how platinum & Kraft stock back in the 1980's played their part in our living a comfortable life now. Wealth isn't the be all in our life. Not depending on government for our needs and wants works for us.
 
Knight said:
Probably missing is the understanding that we live a simple life and don't depend on that stock alone. We are building a way to help assure the well being of our kids. It would take up more space and be useless to explain how platinum & Kraft stock back in the 1980's played their part in our living a comfortable life now. Wealth isn't the be all in our life. Not depending on government for our needs and wants works for us.
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there is nothing to mis-understand , it has been a risky , poor peforming stock for 15 years and was crushed by a simple index fund that has zero individual company risk to boot .

while a SIMPLE s&p 500 fund has just market volatility risk , a stock like ppl has not only market risk but individual company risk .

if you were compensated for the added risk then great but this has lagged badly . listen it's your money and i won't tell anyone what to do , but you may want to think about this .
 
" We are building a way to help assure the well being of our kids."

Our "kids" are building their own future's...whatever that may be. We don't intend to risk our "well being" just so they can have a comfortable future. They work. They know what the risks are by not saving or whatever. We've discussed these issues with them and they understand that they will need to have a LOT more money than us when, and if, they can ever retire. They are doing a good job so far.

We're taking care of ourselves and being frugal with what we DO have. No risky stocks, or mutuals, etc. for us. We've been down that road and lost nearly everything back in '08 with bad advice from a "financial advisor". Never again. If you have money you can play with and are in a position you can not worry about losing it....good for you. Not all of us are that well-heeled to take the risk. Good luck.
 

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