this is the part where i wait for someone to counter this thinking.
$10k in 1.76% interest
or $10k gambling in the stock market?
history would show us that the stock market is a better bet over the long run
but past performance is no indication of future performance.
everyone should have some money in stocks and bonds.just how much of ur savings should be in each is up to u depending on where u r in ur life. if ur closer to 65 u may not want to take a risk in the stock market. and if ur younger, like me then u probably will take that risk (im 80% stocks and 20% bonds). cuz u never know when something will go to shit, and when it does ull need a squirrel fund.
Because there is no free lunch. If you bought FNMIX in 1997, you would have lost half your investment in the next year or so, and it would take until 2007 until the value went back up to the 1997 level. This doesn't mean it's a bad investment, but it's entirely different from a guaranteed fixed-rate investment.
Yeah, I know.... but with interest rates this low, what income are you talking about? You are not even beating inflation for crying out loud. And you are talking about the Asian financial crisis, a one-off event that can take place anywhere in the world. Trust the US government finances more than other countries?
Did anyone factor inflation? The current inflation rate would make any interest gained to zero and close to loss. This is not a good deal at all! You can find much better investments in the stock market, and if your not good at buying stocks on your own then you should go to a broker and find a nice stable mutual fund that pays good dividends. The key to any investment is to beat the inflation rate and make a profit. This is just pointless.
Enjoy investing discussions - some comments if you don't mind:
Why do any of these when you can invest in emerging market bonds? ...
Because there is no free lunch. If you bought FNMIX in 1997, you would have lost half your investment <> until 2007 until the value went back up to the 1997 level. <> it's entirely different from a guaranteed fixed-rate investment.
Exactly. Depends on the circumstances. There's a reason some investments pay more - risk correlates with return.
Title should read: "Invest in legalized Government Ponzi Scheme"
You can hate the country, government, etc., but companies and other governments revolve credit in exactly the same way.
<> cuz u never know when something will go to shit, and when it does ull need a squirrel fund.
True. When in 2007-early 2009 companies failed and the economy tanked, I-Bonds were more stable than gold bars.
<>isn't even keeping up with inflation.
I-Bonds are inflation adjusted 2x/year.
savings rates suck so get into REITs and Dividend stocks. Verizon or Vodaphone has 4% dividends. Microsoft has about 3.3% Higher property REITs are doing well or pick up some soon to be REITs like cell phone towers owners.
Stock divvys are taxable at fed/state/local level. I own some REITs, which can be risky and unpredictable, and may need special tax treatment due to depreciating assets, etc. Risk goes up with return - and there's a reason for those huge payouts - it's not a gift.
The key to any investment is to beat the inflation rate and make a profit. This is just pointless.
Not true. Depends on the circumstances. These inflation-adjusted bonds can be a parking spot or emergency safe nest egg for many individuals.-----
You're right, no HDMI.
More Americans can name the Three Stooges than can name the three branches of government.
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