Tuesday, October 5, 2010

It's Raining...

Today I plan two posts. This one is meant to be cathartic and the other informative.

My mom is going to cringe when she reads this, but oh well...

We are still deciding about the work thing but in the meantime we've taken a hard look at our investments and gotten fiscal advice from my FIL, who is a financial guru and looks at the stock market on a regular basis. We've decided to cash in some of the EE bonds. (uh, oh, I can see my mom giving me a look).

Let me explain. Since I was two, my parents and grandparents have bought me EE bonds from the government. EE bonds are meant for education. I've never used them. I sweated my way through college on scholarships and paid off my tiny student loan with money I saved in a saving account. So Hubby and I intended to use the bonds as rainy day money or cash them in once they reached final maturity.

Well, Mom, it's raining. Why the bonds as opposed to other investments that we have? Well, we're not touching the IRAs. Bad idea. You get hit with major penalties when you dip into any retirement account. The government and investors want your money to stay put. The other investments are earning higher returns. That's really the bottom line. They're making us more money so we're not moving stuff out them either.

While the bonds earn steadily and won't crash like other accounts, t (dang touch screen)hey don't have as high an interest rate. But don't worry, Mom, we're cashing in those with the lowest interest rates and only some of them. We're also waiting until November when their next date of maturity is. For those of you who don't know, bonds' interest compounds every six months as opposed to every month like a savings account.

HB has one bond, and that we won't mess with. BTW, I have a bond that belongs to Dad. Do you want me to keep it in my safety deposit box, or send it back to you?

2 comments:

  1. I am confused where are you getting better than 4%? We want to invest. Yes, a saving bond pays interest every six months, but the you still get paid interest every month, you just can't get it but every six months. By the way does FIL have saving bonds?

    Please send your dad's bond back to him.

    Thanks
    Mom

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  2. Vanguard's Total Stock Market Index Fund has a 4.87% YTD and an 11% 1 Year

    Janus Worldwide Fund has a 9.64% YTD and a 13.88% 1 Year (probably thank China for that)

    I also have some money in an energy fund with Duff & Phelps, they don't have a website so I can't give current info, but their performance has actually been really good. I think they managed to hold their value pretty well back in '08 when everything else dropped 20-30%, and they've been getting at least 5% a year since then.

    Basically the idea is everything is coming out of the '08 slump, so most stocks are doing well right now, and it's a poor idea to sell.

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