Investing

Countrywide Offering 5.45% 6 Month CD

16 years ago
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In Countrywide’s desperation for deposits they are offering 5.45% for 6 month CDs. As long as you keep your principal and interest under the FDIC limits this is a pretty good deal with mostly administrative risk (i.e., waiting a few days for FDIC payment if they go under).

Annual Purchase Limit For Savings Bonds Reduced to $5,000

17 years ago
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Treasury Direct announced that they are dropping the Savings Bond purchase limit from $30K/year to $5K/year.  This limit applies separately to paper and electronic Savings Bonds and to each social security number, so a couple could purchase up to $20K total (each of them $5K of paper and $5K of [...]

Hedge Fund Warning

17 years ago
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Whenever someone asks me about hedge funds, I explain the following.  Hedge funds use strategies that provide above market returns most of the time but occasionally blow up. If you factor in the blow-up and the incredible fees they charge the long term expected return is generally poorer than what [...]

Advice to Avoid

17 years ago
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Clements warns against some common financial advice targeted at young people that may not be in their best interest. Create a 6 month emergency fund. Buy the biggest house possible. Buy cash value life insurance. Invest in all or almost all equities. On the positive side he does [...]

If It Sounds Too Good to be True …

17 years ago
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Humberto Cruz reports on people’s lack of investing basics (pdf) which allows them to be easily talked into investing in poor deals. 43 percent of American investors in a recent survey said they would likely put their money in at least one of these three “opportunities.” a new fuel-cell technology [...]

Waiting for Bubbles to Burst

17 years ago
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John Maudlin has republished two papers this week. The second one is a recent essay by Jeremy Grantham (which you can also find on his GMO website (registration required). The title of Grantham’s piece is “It’s Everywhere, In Everything: The First Truly Global Bubble (Observations following a [...]

Study Says Private Equity Underperforms S&P 500

17 years ago
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With the private equity hype machine ratcheting up these days, here is a timely paper analyzing private equity performance. The punchline is that on average private equity has been under performing the S&P 500 by more than an annualized 3%. Abstract: This literature review covers the issues faced [...]

Beware of Equity Indexed Annuitys

17 years ago
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Scott Burns writes about a study on equity indexed annuities (warning PDF). Here is his summary “…the study estimates that “between 15 percent and 20 percent of the premium paid by investors in equity-indexed annuities is a transfer of wealth from unsophisticated investors to insurance companies [...]

Most Successful Investors not Motivated by Money

17 years ago
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William Bernstein writes about how the most successful investors are ones which are not focused on financial success. Two nuggets from the piece. Three things provide long-lasting satisfaction, as quantitatively measured by academic psychologists: autonomy meaningful contact with others the [...]

Fundamental Index Funds at Schwab

17 years ago
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While Vanguard is generally my preferred vendor for people to use when managing investments on their own, Schwab‘s latest offering is a real plus for those who want to be on the Schwab platform. Fundamental indexes use a combination of company attributes (e.g., sales, cash flow, dividends, book [...]
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