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Respected Contributor
Posts: 4,202
Registered: ‎07-02-2015

Re: C D, interest rates

[ Edited ]

@Annabellethecat

 

Pharmaceuticals and biotech stocks have been  among the very WORST-performing stocks in my trading portfolio for quite a while, except for Johnson & Johnson maybe, which is doing OK.

 

Stock classes fluctuate all the time.  Pharmas are good sometimes, sometimes not.

 

 In the current volatile environment, the most stable stocks seem  to be those paying good dividends and those which have a good long record of raising their dividends year after year.  This could change back to a time when high-tech,  riskier "growth"' stocks get popular again.

 

If choosing a broker instead of going through the long learning curve of understanding the stock market oneself, it is necessary to find a "fiduciary" financial advisor who is looking out for the client's best interests.  This fs NOT always going to be  a stock broker, whose role and job depend on selling stocks to anyone and everyone they can, no matter how wise the purchase might be.

Honored Contributor
Posts: 10,239
Registered: ‎03-10-2010

If the interest .rates go much lower the bank will charge us. 

Respected Contributor
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Registered: ‎03-13-2010

The CD rates are pretty bad but as someone already mentioned, today's finances for your own situation depends on your plans.  Right now, if you are planning on taking out a loan for a mortgage or to buy a car, interest rates are still pretty low which is great.  However, if you are depending upon interest earned on your accounts as part of your income stream, you are probably  hurting.

 

About twenty years ago I saw a financial planner who advised me to keep monies in many different places depending upon when I might need it  - monies needed in the shorter term in savings accounts, money markets, CDs, etc and the stock market when you have the ability to keep money invested for longer term.  Yes, you can lose money in the stock market but over 10 years or so you will usually earn much more than keeping dollars in a conservative place where you need the money sooner rather than later.  And yes, as already said - if you put your money in the stock market you have to be willing to keep it there and not freak out when the market falls.  Never was this more evident than in 2008.  He advised me to avoid looking at my account - let it ride and it'll correct again eventually and it did. If you are afraid of every little rise and fall of the stock market, you probably shouldn't invest there.  

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Registered: ‎01-19-2015

@shoekitty wrote:

If the interest .rates go much lower the bank will charge us. 


@shoekitty: ...Like Japan and some countries in Europe are already doing. Ridiculous.

~~Be careful when you follow the masses. Sometimes the 'm' is silent.~~
Honored Contributor
Posts: 10,624
Registered: ‎01-19-2015

I find it curious that as soon as Janet Yellin and the Federal Reserve Bank finally raised the federal funds rate (for the first time since 2008) by a quarter of a percent, the banks immediately raised their loan rates, but NOT the interest rates they pay savers. So, if l can't get a higher interest rate on my savings, I'm not going to spend money to "stimulate the economy." To my way of thinking, the whole system is rigged.

~~Be careful when you follow the masses. Sometimes the 'm' is silent.~~
Honored Contributor
Posts: 10,239
Registered: ‎03-10-2010

Re: C D, interest rates

[ Edited ]

@Financialgrl wrote:

The CD rates are pretty bad but as someone already mentioned, today's finances for your own situation depends on your plans.  Right now, if you are planning on taking out a loan for a mortgage or to buy a car, interest rates are still pretty low which is great.  However, if you are depending upon interest earned on your accounts as part of your income stream, you are probably  hurting.

 

About twenty years ago I saw a financial planner who advised me to keep monies in many different places depending upon when I might need it  - monies needed in the shorter term in savings accounts, money markets, CDs, etc and the stock market when you have the ability to keep money invested for longer term.  Yes, you can lose money in the stock market but over 10 years or so you will usually earn much more than keeping dollars in a conservative place where you need the money sooner rather than later.  And yes, as already said - if you put your money in the stock market you have to be willing to keep it there and not freak out when the market falls.  Never was this more evident than in 2008.  He advised me to avoid looking at my account - let it ride and it'll correct again eventually and it did. If you are afraid of every little rise and fall of the stock market, you probably shouldn't invest there.  

 

 

Shoekitty said

 

This is so true.  You have to be in it for the long haul.  The stock market is great for extended investment.  We have our 401K invested in very conservative S&P stocks.  We would rather have the money in there, than have  panic when the market fluctuates severely!  In 1994, and 2008 we lost very little from our portfolio. A couple of my husbands co workers that were always bragging about how much their returns were, saw losses of over a million in their 401K because they had invested high risk,  Yes, they had temporary high returns,, until the crash.  My husband is almost 69, and wants to work until 70.  Why?  Just because he wants to say he worked there until 70!  LOL!


 

Esteemed Contributor
Posts: 7,829
Registered: ‎03-18-2010

@shoekitty wrote:

If the interest .rates go much lower the bank will charge us. 


Switzerland has a negative bank rate right now. 

Those who make peaceful revolution impossible will make violent revolution inevitable.
JFK
Respected Contributor
Posts: 4,202
Registered: ‎07-02-2015

Re: C D, interest rates

[ Edited ]

it's important to keep in mind, when discussing interest rates, that central banks of various countries (including the Federal Reserve Bank here in the U.S.) only control overnight lending rates between banks in transactions. 

 

This doesn't mean a bank doesn't  have  its own investment programs (including lending money  at a profit to consumers and/or businesses) that generate income and higher interest rates than the simple overnight inter-bank lending rate set by a national banking authority.

 

When the banks make money from investing in stock, bond, commodity or real estate markets and by making profitable loans to consumers and businesses, they can pay depositors higher interest rates.

 

The Federal Reserve or the Bank of Japan has no direct  control on what banks pay their depositors on savings, or what they charge borrowers for loans.  (that I know of)

 

 

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@lucieinthesky wrote:

I worked in the banking industry for 30 years and remember when CD rates were as much as 18.00%  -- those with considerable funds to invest did very well. Alas, those days are gone, never to return again.

 

If you are putting money in savings or CD's in today's market, it really doesn't matter from one bank to another - none are paying enough to get rich on.  It is a safe haven for your money, but certainly not going to grow.


 

I remember those days, and many people did make a lot of money on their CD's back then. 

 

I had a friend who's father was retired, and I believe he had the first dime he ever made. He had so many CD's with so much money in them back at that time, and he just kept reinvesting the earnings. 

 

He looked and lived like a homeless person, but he sure knew how to save and grow his money. 

Honored Contributor
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Registered: ‎03-09-2010

@lucieinthesky wrote:

I worked in the banking industry for 30 years and remember when CD rates were as much as 18.00%  -- those with considerable funds to invest did very well. Alas, those days are gone, never to return again.

 

If you are putting money in savings or CD's in today's market, it really doesn't matter from one bank to another - none are paying enough to get rich on.  It is a safe haven for your money, but certainly not going to grow.


In those days the interest rate to buy a home or a car were around 13 to 15 % though. Our first mortgage was during the Reagan admin. and it was 15% until we paid thousands of dollars in points just to bring it down to 13%. That was when I turned democrat.