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2 yr cds. 2.85%

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  • Kennyt7
    replied
    INTERIM-spell check

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  • Random1
    replied
    The closer you get to retirement the more you think about this. In 2007 , I did not even seem to notice that we went through such a bad time, I had a good stable income and just kept on buying stocks through it. It retrospect I did real well. Fast forward, hopefully a year away from retirement, a long down or sideways market would be much more troubling with out some preplanning, with some boring stable assets. If I were 10 years away , I would just keep buying every month. But now for me, it is more about asset preservation than maximizing gains. As Bill Bernstein would say, if you win the game then stop playing.

    The Dow Jones Industrial Average (DJIA), which had lost over half its value from its August 2007 peak, began to recover in March 2009 and, four years later, in March 2013, broke its 2007 high. For workers and households, the picture was less rosy. Unemployment was at 5% at the end of 2007, reached a high of 10% in October 2009, and did not recover to 5% until 2015, nearly eight years after the beginning of the recession. Real median household income did not surpass its pre-recession level until 2016.

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  • nastle
    replied
    Originally posted by Random1 View Post
    They could be cheaper for the next 10 years, might need the money in the interum
    Stocks still going down for 10 yrs straight?

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  • medicoFIRE
    replied
    Even more reason for me to build my ibond stash now. Hopefully I will have 600k plus interest in ibonds in 30 years by retirement

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  • Random1
    replied
    They could be cheaper for the next 10 years, might need the money in the interum

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  • nastle
    replied
    Why not buy more stocks at this point considering they are so much cheaper?

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  • Tangler
    replied
    A CD ladder as part of your IPS is reasonable. Is that what this CD is for?


    If the 2 year CD is part of a CD ladder that will help you avoid SORR then I think it is reasonable.

    I personally will need a SORR fighting cash-like bucket soon.

    I am not ready to buy a 2 year CD, but I am considering some short term bonds and CDs as well as a HY savings account to hold 200-500k by the time I totally retire in a few years.

    My very simple plan is to basically have a bunch of stock index funds that I ignore for 20 years and a cash bucket of 100-500k when I stop working.

    Is this particular CD good? I don't know. Seems like they are a moving target. If part of your ladder it might be a reasonable choice.

    I am looking at 3mo, 6mo, bonds and CDs right now. This and HY savings accounts.

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  • The White Coat Investor
    replied
    Originally posted by JWeb View Post

    How many plans have a statement about when do use a CD? Do you go over that in your course? Maybe you do. I understand the "Do what your written plan says" mentality. But what if your plan doesn't say anything about what to do in this situation? Then what?
    Sit down. Think about it rationally. And add it to your plan. Then follow your plan. You think this is the only time in your life this will happen? Probably not.

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  • JWeb
    replied
    Originally posted by jacoavlu View Post

    the assumption is someone is changing their plan or didn't have a plan in the first place. if they already had a plan they wouldn't be sitting around with cash thinking about buying a CD
    That is an excellent point.

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  • jacoavlu
    replied
    Originally posted by JWeb View Post

    How many plans have a statement about when do use a CD? Do you go over that in your course? Maybe you do. I understand the "Do what your written plan says" mentality. But what if your plan doesn't say anything about what to do in this situation? Then what?
    the assumption is someone is changing their plan or didn't have a plan in the first place. if they already had a plan they wouldn't be sitting around with cash thinking about buying a CD

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  • JWeb
    replied
    Originally posted by The White Coat Investor View Post

    Without knowing the future, these sorts of questions are impossible to answer. I'd make a written plan and follow it. If your plan indicates you should now put money into CDs, I would do so. If it doesn't, then I wouldn't. It's that simple.
    How many plans have a statement about when do use a CD? Do you go over that in your course? Maybe you do. I understand the "Do what your written plan says" mentality. But what if your plan doesn't say anything about what to do in this situation? Then what?

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  • Kennyt7
    replied
    Cds are not illiquid!!!

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  • jacoavlu
    replied
    uh lemme see give up liquidity 2 years for like minus 10% real return no thank you

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  • Kennyt7
    replied
    this is a CD through Vanguard. Of course its liquid but I have 265k sitting in the MM fund

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  • Random1
    replied
    I look at it if you have extra money sitting in a bank account, some interest is better than none. It is pretty easy to get out of a CD if you need to, basically losing accumulated interest.

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