Seeking some yield on my money (1 Viewer)

[Dentist]

Anyone here buy I-bonds? I can see the inflation rate exceeding the short-term risk free rate for some time. This might be worth it.

i am waiting for the rate change in April to see if it gets better or worse... if the rate looks better i'm going to pick up probably 5k worth.the bummer is that right now they are paying 0% of the fixed yield, the 3% part that is the inflation is what changes twice a year.

 

[Fennis]

 

[Dentist]

List of preferred shares.

I don't think you can go wrong with the Wells Fargo 7.5% (WFCL). It's selling for over par so its yield is 7.1%.

If you're willing to take some risk, BACL is selling at a discount and has a return of 9.3%. It also has its ex-date at the end of the month.

Up from $770 when I posted this to $894 today.

i don't understand convertible preferred shares like bac-l - what happens when it matures in 2013?

 

[cstu]

List of preferred shares.

I don't think you can go wrong with the Wells Fargo 7.5% (WFCL). It's selling for over par so its yield is 7.1%.

If you're willing to take some risk, BACL is selling at a discount and has a return of 9.3%. It also has its ex-date at the end of the month.

Up from $770 when I posted this to $894 today.

i don't understand convertible preferred shares like bac-l - what happens when it matures in 2013?

BOA can buy it back for $1000 a share.

 

[Dentist]

List of preferred shares.

I don't think you can go wrong with the Wells Fargo 7.5% (WFCL). It's selling for over par so its yield is 7.1%.

If you're willing to take some risk, BACL is selling at a discount and has a return of 9.3%. It also has its ex-date at the end of the month.

Up from $770 when I posted this to $894 today.

i don't understand convertible preferred shares like bac-l - what happens when it matures in 2013?

BOA can buy it back for $1000 a share.

ok, but can't they convert you into BAC common stock also... isn't that part of it?

"The shares are normally convertible any time at the holder's option into a specified number of common shares based on a specified conversion price for the common shares. Generally the company also has the right to force conversion of the preferred shares whenever the price of the common stock equals or exceeds a specified price for a specified period such as 20 trading days."

oh wait, i read the prospectus... it gives you 20 shares of BAC at $50 a share.

LOL BAC won't be at $50 a share unless they do a 10-1 reverse split.

 

[MarshallPlan]

 

[cstu]

List of preferred shares.

I don't think you can go wrong with the Wells Fargo 7.5% (WFCL). It's selling for over par so its yield is 7.1%.

If you're willing to take some risk, BACL is selling at a discount and has a return of 9.3%. It also has its ex-date at the end of the month.

Up from $770 when I posted this to $894 today.

i don't understand convertible preferred shares like bac-l - what happens when it matures in 2013?

BOA can buy it back for $1000 a share.

ok, but can't they convert you into BAC common stock also... isn't that part of it?

"The shares are normally convertible any time at the holder's option into a specified number of common shares based on a specified conversion price for the common shares. Generally the company also has the right to force conversion of the preferred shares whenever the price of the common stock equals or exceeds a specified price for a specified period such as 20 trading days."

oh wait, i read the prospectus... it gives you 20 shares of BAC at $50 a share.

LOL BAC won't be at $50 a share unless they do a 10-1 reverse split.

Exactly why I'm not worried about them buying these back any time soon.

 

[NeverEnough]

I would like a safer place than the stock market (I"m a rookie w/that anyway) to make my $ work for me as well.

 

[Dentist]

I would like a safer place than the stock market (I"m a rookie w/that anyway) to make my $ work for me as well.

what state do you live in?

 

[Bob Sacamano]

Anyone here buy I-bonds? I can see the inflation rate exceeding the short-term risk free rate for some time. This might be worth it.

i am waiting for the rate change in April to see if it gets better or worse... if the rate looks better i'm going to pick up probably 5k worth.the bummer is that right now they are paying 0% of the fixed yield, the 3% part that is the inflation is what changes twice a year.

A couple of things here:1. Are you still waiting on this or did you take the plunge? I'm thinking of going this route myself with some of the "emergency fund".

2. It looks to me like the limit is $10,000 rather than $5,000. It used to be $5k paper and $5k electronic, but they've gone away from the paper and towards all electronic purchase at $10k now. Also, it appears to be per person, so if you wanted to open a TreasuryDirect account in your wife's name, I think you could go up to $20k here.

Am I missing something on this? Any reason to NOT go this route? I know there's better yield out there, especially in things like preferreds. But for money you want to stash away in low-to-no risk options and given what I think inflation is going to look like in the near future, I'm not seeing anything I think is better. Of course, I'm also not a fan of the current fixed rate being 0%.

 

[Juxtatarot]

Anyone here buy I-bonds? I can see the inflation rate exceeding the short-term risk free rate for some time. This might be worth it.

i am waiting for the rate change in April to see if it gets better or worse... if the rate looks better i'm going to pick up probably 5k worth.the bummer is that right now they are paying 0% of the fixed yield, the 3% part that is the inflation is what changes twice a year.

A couple of things here:1. Are you still waiting on this or did you take the plunge? I'm thinking of going this route myself with some of the "emergency fund".

2. It looks to me like the limit is $10,000 rather than $5,000. It used to be $5k paper and $5k electronic, but they've gone away from the paper and towards all electronic purchase at $10k now. Also, it appears to be per person, so if you wanted to open a TreasuryDirect account in your wife's name, I think you could go up to $20k here.

Am I missing something on this? Any reason to NOT go this route? I know there's better yield out there, especially in things like preferreds. But for money you want to stash away in low-to-no risk options and given what I think inflation is going to look like in the near future, I'm not seeing anything I think is better. Of course, I'm also not a fan of the current fixed rate being 0%.

I ended up pulling the trigger on this for $10,000 about a month ago. In case of emergency, you can cash out after one year (with interest penalty) so that's not too bad. I will probably purchase another $10K next year.

 

[azgroover]

Thanks for bringing these to my attention Dentist. I too took a plunge on a small amount sometime in January..just $2500 worth. My only gripe is the website. Since I clear my browser everytime I close it, I have to obtain a temporary passcode everytime I want to login. It's an easy enough process, but a little annoying. It'd be cool if they had mint.com integration too.

 

[Dentist]

Anyone here buy I-bonds? I can see the inflation rate exceeding the short-term risk free rate for some time. This might be worth it.

i am waiting for the rate change in April to see if it gets better or worse... if the rate looks better i'm going to pick up probably 5k worth.the bummer is that right now they are paying 0% of the fixed yield, the 3% part that is the inflation is what changes twice a year.

A couple of things here:1. Are you still waiting on this or did you take the plunge? I'm thinking of going this route myself with some of the "emergency fund".

2. It looks to me like the limit is $10,000 rather than $5,000. It used to be $5k paper and $5k electronic, but they've gone away from the paper and towards all electronic purchase at $10k now. Also, it appears to be per person, so if you wanted to open a TreasuryDirect account in your wife's name, I think you could go up to $20k here.

Am I missing something on this? Any reason to NOT go this route? I know there's better yield out there, especially in things like preferreds. But for money you want to stash away in low-to-no risk options and given what I think inflation is going to look like in the near future, I'm not seeing anything I think is better. Of course, I'm also not a fan of the current fixed rate being 0%.

I am waiting until the rate change to make my decision.

I am still thinking about those, but I also have pursued other interests in preferred stocks and municipal bonds which takes on more risk, but i wasn't satisfied with that yield, and i fear that yield may drop the next round in late april

 

[eoMMan]

AT&T, Verizon, Merck, J&J, etc. You get the point.

 

[Bob Sacamano]

AT&T, Verizon, Merck, J&J, etc. You get the point.

You don't seem to.

 

[Dentist]

AT&T, Verizon, Merck, J&J, etc. You get the point.

depending on your time horizon i'm sure these are excellent choices.Having said that, even big companies can have something go awry and you could get a dip in the price of the share far beyond your yield.this is why i chose not to go this route.I'd like some yield with a small chance of either capital appreciation or depreciation. And choosing individual bonds for the individual investor is hard and liquidity isn't as good, and commissions can be high.But exchange traded debt and preferred stocks and even ETFs with yield are quite liquid and easier to search and screen

 

[Dentist]

I-BONDS Update:

I decided not to buy any - The rate if you buy now is 3.06% - and if you buy this month you can lock in that rate for 6 mo.

But based on this article, the prediction is for the new rate starting may 1 to be 2.2% http://www.fivecentnickel.com/2012/04/16/series-i-savings-bond-rates-may-2012/

Certainly that's still better than CD rates, but it's just not good enough.

I'm sticking with investment Grade Preferred Stocks

 

[cstu]

List of preferred shares.

I don't think you can go wrong with the Wells Fargo 7.5% (WFCL). It's selling for over par so its yield is 7.1%.

If you're willing to take some risk, BACL is selling at a discount and has a return of 9.3%. It also has its ex-date at the end of the month.

Up from $770 when I posted this to $894 today.

i don't understand convertible preferred shares like bac-l - what happens when it matures in 2013?

BOA can buy it back for $1000 a share.

ok, but can't they convert you into BAC common stock also... isn't that part of it?

"The shares are normally convertible any time at the holder's option into a specified number of common shares based on a specified conversion price for the common shares. Generally the company also has the right to force conversion of the preferred shares whenever the price of the common stock equals or exceeds a specified price for a specified period such as 20 trading days."

oh wait, i read the prospectus... it gives you 20 shares of BAC at $50 a share.

LOL BAC won't be at $50 a share unless they do a 10-1 reverse split.

Exactly why I'm not worried about them buying these back any time soon.

Shares are now up to $1040.

 

[Grahamburn]

2014 update? Online savings accounts are barely 1%.

 

[Juxtatarot]

I still like ibonds for very, very safe money. They've been yielding about 1 1/2 to 2 percent. Interest being tax deferred is also nice.

 

[Dentist]

Best move I could've made when I started the thread was to put everything in the S&P 500..

would've beaten the crap out of anything else i could have come up with.

I still have a massive cash position and struggle to find ways to utilize it. Sometimes I see a preferred stock or exchange traded debt issue and pick it up.

I've even payed down more on my home even after refinancing it from the original post where i was at 3.7% 15 year to 2.7% 10 year.

right now paying off the home at a guaranteed 2.7% even though I think that's generally stupid, may actually be my safest play at this point.

The only problem is that I only owe about 90K on the home so I'd still have a bunch of cash left afterwards to try and find a home for.

 

[steelerfeever]

Read the entire thread. And the following hasn't been brought up yet, and sounds ludicrous by all accounts until you look at the internal rate of return, but check out cash value life insurance. There are many highly rated mutual life insurance carriers offering fixed universal and whole life with returns in the 2-3% range NET of fees and costs of the death benefit. Complete liquidity, use, and control of the cash. Interest grows tax-deferred, no annual 1099's. Many people like us are in the "maxed 401k, don't qualify for a Roth, and hate the stock market" park their cash here. They don't use it for the death benefit, although that's a bonus, they use it for a safe place to park cash that pays more than the bank. The 4 highest rated life ins carriers are NY Life, Northwestern Mutual, State Farm, and Met Life. Ask for an illustration that shows the internal rate of return (net of costs/fees).

 

[Juxtatarot]

I guess I'll bump this thread with this.

I Bond Earnings Rate of 0.00% includes a Fixed Rate of 0.00%
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the 30-year life of the bond, and the semiannual inflation rate. The 0.00% earnings rate for I bonds bought from May 2015 through October 2015 applies for the first six months after the issue date. The earnings rate combines a 0.00% fixed rate of return with the -1.60% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers
(CPI-U).

Kind of sucks. I've been transitioning part of my emergency fund into i bonds the last few years. I'll have to wait until at least November for this year.

 

[Dentist]

I guess I'll bump this thread with this.

I Bond Earnings Rate of 0.00% includes a Fixed Rate of 0.00%The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the 30-year life of the bond, and the semiannual inflation rate. The 0.00% earnings rate for I bonds bought from May 2015 through October 2015 applies for the first six months after the issue date. The earnings rate combines a 0.00% fixed rate of return with the -1.60% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers

(CPI-U).

Kind of sucks. I've been transitioning part of my emergency fund into i bonds the last few years. I'll have to wait until at least November for this year.

lol... they probably aren't going to sell many i-bonds.. and they probably don't want to

 

[Juxtatarot]

I guess I'll bump this thread with this.

I Bond Earnings Rate of 0.00% includes a Fixed Rate of 0.00%The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the 30-year life of the bond, and the semiannual inflation rate. The 0.00% earnings rate for I bonds bought from May 2015 through October 2015 applies for the first six months after the issue date. The earnings rate combines a 0.00% fixed rate of return with the -1.60% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers

(CPI-U).

Kind of sucks. I've been transitioning part of my emergency fund into i bonds the last few years. I'll have to wait until at least November for this year.

lol... they probably aren't going to sell many i-bonds.. and they probably don't want to

I haven't really been following inflation. I guess the super cheap oil prices were the reason for the deflation and we'll see a jump next time? Not that I'm rooting for inflation but I'd like my I Bonds to earn more than my savings account.