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Post by sigurdur on Jul 29, 2015 18:42:36 GMT
I can, presently, think of only one investment that "might" pay out more than 0.25%. That is to buy Canadian $.
You can do so, leave the money in Canada in a savings account that pays more than 0.25%. Canada is going into a recession, but the underlying strength is that they are so very very resource rich.
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Post by sigurdur on Jul 29, 2015 18:43:40 GMT
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Post by walnut on Jul 29, 2015 19:47:40 GMT
I can, presently, think of only one investment that "might" pay out more than 0.25%. That is to buy Canadian $. You can do so, leave the money in Canada in a savings account that pays more than 0.25%. Canada is going into a recession, but the underlying strength is that they are so very very resource rich. But I would think trends will need to change for that to pay off, Canadian $ losing value against USD much faster than what that interest is paying it looks like
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Post by walnut on Jul 29, 2015 20:11:46 GMT
Anyway, Fed has been talking about raising interest rates in September. Even though this is well known by everyone, I think it might cause a gradual sell-off which will accelerate. This bull market is way high.
However, very often these days in the information age, it seems to be sell the good news and buy the bad news which works the best, as everything is already known in every corner of the globe by the time it happens. The truth seems to be, you just cannot out-guess the market, is is impossible over any period of time. That is why I look for high-quality hedges and well-designed synthetic securities to make money. The more foolish way to trade is day-trading small stocks and market timing futures, and stuff like that, it is a fools errand. The synthetics are really more common sense. Just my opinion
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Post by sigurdur on Jul 29, 2015 22:50:10 GMT
I can, presently, think of only one investment that "might" pay out more than 0.25%. That is to buy Canadian $. You can do so, leave the money in Canada in a savings account that pays more than 0.25%. Canada is going into a recession, but the underlying strength is that they are so very very resource rich. But I would think trends will need to change for that to pay off, Canadian $ losing value against USD much faster than what that interest is paying it looks like There will be a bottom in the Canadian $ Slide. 66 is one potential mark.
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Post by duwayne on Jul 30, 2015 2:18:44 GMT
Duwayne, I just "invested" in an 18 month CD. The rate is a whopping .25%. The penalty for early withdrawal? 1%. My only incentive for doing so was to have an emergency fund that was far enough out of reach but yet liquid enough to grab should I lose my job in the oilfield. (I love my wife but saving is not one of her strong suits). The current FED policy is punishing savers. There is little or no return in anything else outside of real estate. And I agree with sigurdur. The FED can't raise rates (much) or they wont be able to service the debt. I see us locked in a continued cycle of stagnation for the foreseeable future. glennkoks, a savings account at MySavingsDirect has an interest rate of 1.24%, at least as of now, with FDIC protection and the money can be withdrawn or added at any time. And you can invest from your easychair at home.
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Post by duwayne on Jul 30, 2015 2:40:53 GMT
Sigurdur, Glennkoks,
My 5% interest rate example isn’t going to happen anytime soon. It was meant to illustrate a point. Specifically that the decline in interest rates has had a major impact on savers and their spending. And an increase in rates could jump start consumer spending while correcting an injustice to retirees and near retirees and savers in general.
The Fed Funds rate was over 5% from mid-2006 to mid-2007 and the long-term average has been above 5%.
In December 2014, the Fed projected a 1.25% interest rate by the end of 2015. That’s 25% of the way to 5%. They anticipated rates climbing further in subsequent years. Some members foresaw rates of 3.75% within 3 years as I recall.
What’s held the Fed back from increasing the rate? It’s because of a slow economy due to lackluster consumer spending and the resultant low inflation. It’s not the concern about the government going bankrupt. What could jump start spending? Go back to the first paragraph.
As to the concern that a 5% interest rate would mean a $1 trillion increase in interest on the national debt……. If the rate was to jump to 5%, the interest paid on existing debt wouldn’t change. So the interest payments in the near term would only go up a fraction of $1 trillion if that is the right figure because of new borrowing. And if the GNP were to increase by 4 or 5%, could government income increase by 4 to 5% in the near term and actually reduce the deficit?
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Post by glennkoks on Jul 30, 2015 2:56:22 GMT
Duwayne, I just "invested" in an 18 month CD. The rate is a whopping .25%. The penalty for early withdrawal? 1%. My only incentive for doing so was to have an emergency fund that was far enough out of reach but yet liquid enough to grab should I lose my job in the oilfield. (I love my wife but saving is not one of her strong suits). The current FED policy is punishing savers. There is little or no return in anything else outside of real estate. And I agree with sigurdur. The FED can't raise rates (much) or they wont be able to service the debt. I see us locked in a continued cycle of stagnation for the foreseeable future. glennkoks, a savings account at MySavingsDirect has an interest rate of 1.24%, at least as of now, with FDIC protection and the money can be withdrawn or added at any time. And you can invest from your easychair at home. Duwayne, All very true. But it's just too dog gone easy for my wife to click a button and transfer money from savings to checking. I find out that when we do not have easy access to cash we hold on to it longer. Emergency funds are not very good if they get spent before the "emergency".
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Post by glennkoks on Jul 30, 2015 3:10:28 GMT
I have two investment "ideas" that I may or may not act on.
1.) Gold. I am not a gold bug, typically I stay away. But my thought was that continued strife in China would lead to an increase in panicked gold buying from those Chinese tired of watching their market crash. Along with just about all commodities it has really tanked and could be testing lows.
2.) Continue investing in the current Bull Market run in U.S. equities. Trouble around the world will leave those in trouble markets looking for a ROI. The U.S. is the "least worst".
Thoughts on my logic from the forum?
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Post by sigurdur on Jul 30, 2015 3:53:56 GMT
I have two investment "ideas" that I may or may not act on. 1.) Gold. I am not a gold bug, typically I stay away. But my thought was that continued strife in China would lead to an increase in panicked gold buying from those Chinese tired of watching their market crash. Along with just about all commodities it has really tanked and could be testing lows. 2.) Continue investing in the current Bull Market run in U.S. equities. Trouble around the world will leave those in trouble markets looking for a ROI. The U.S. is the "least worst". Thoughts on my logic from the forum? Thoughts on gold are that $900.00 will be an easy target, with mid $700's following. Gold has become a traded commodity because of the large increase in supply. It is heavily used in electronics, and mining output grew exponentially when the price was higher. Low interest rates are fueling the stock market. Banks are very large holders of stocks. They borrow at the libor rate of .0025% and invest in stocks. That is one of the reasons that the economy is not growing even tho rates are low. It is still hard to get money for a business. As far as govt borrowing costs. Yes, a percentage of the current debt is locked in at short term low interest rates. The problem is, our govt has become addicted to short term bonds. treas direct has the break down. Way to many 1 and 2 year T bills have been put out. The rise in govt service interest expense will balloon rapidly.
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Post by walnut on Jul 30, 2015 4:06:06 GMT
I have two investment "ideas" that I may or may not act on. 1.) Gold. I am not a gold bug, typically I stay away. But my thought was that continued strife in China would lead to an increase in panicked gold buying from those Chinese tired of watching their market crash. Along with just about all commodities it has really tanked and could be testing lows. 2.) Continue investing in the current Bull Market run in U.S. equities. Trouble around the world will leave those in trouble markets looking for a ROI. The U.S. is the "least worst". Thoughts on my logic from the forum? Glenn, I follow your logic and have thought those things, but: gold- I just stay away 100%. Might be headed to $600. Who knows. Such underlying weakness, why dare try to pick a bottom? The stock market may be the least worst, but on the long term charts it really does look like it is finally beginning to roll over. Be ready to bail fast if things seem to be going wrong. I'd say find a quality stock that pays a dividend, that you wouldn't mind owning, and sell puts on it at a strike price you would be comfortable acquiring shares at if put to you. Then as you might accumulate the stock, sell covered calls against it. Doing these things you almost can't go wrong in the long term. Just my opinions
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Post by glennkoks on Jul 30, 2015 13:51:05 GMT
Sigurdur,
I don't see the low rates going away anytime soon. The Fed has not hiked rates in almost a decade and my bet is if they do it in September it won't be much. In short more fuel for the equity bubble.
Walnut,
Good sound advice. I am just trying to find the Anti-China trade as I feel that there house of cards is in dire shape.
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Post by nemesis on Jul 30, 2015 21:22:52 GMT
I have two investment "ideas" that I may or may not act on. 1.) Gold. I am not a gold bug, typically I stay away. But my thought was that continued strife in China would lead to an increase in panicked gold buying from those Chinese tired of watching their market crash. Along with just about all commodities it has really tanked and could be testing lows. 2.) Continue investing in the current Bull Market run in U.S. equities. Trouble around the world will leave those in trouble markets looking for a ROI. The U.S. is the "least worst". Thoughts on my logic from the forum? www.cityam.com/221058/it-all-over-gold"Gold took a nosedive last week when an unknown entity – with considerable power, perhaps a large investment bank or central bank – offloaded 57 tonnes of gold futures contracts and physical gold onto the market. That figure is around 2 per cent of global annual production.".....
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Post by glennkoks on Jul 30, 2015 22:08:21 GMT
nemesis,
When shoeshine boys start giving you stock advice it's time to get out of the market.
When you start reading articles that declare the "end of gold" it's probably getting close to buying time. I try to be a contrarian when buying.
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Post by Ratty on Jul 30, 2015 23:32:45 GMT
I try to be contrarian all the time ......
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