Cash
Right now is a tough time to be invested in cash. By cash I mean CD’s, money market accounts, government bonds, and actual cash whether it be under the mattress or in the bank. Interest rates are going down causing less return on cash investments and inflation is going up making that cash worth even less. The weakness in the dollar is also contributing to the need to find a better investment for the cash portion of our portfolios. In finding these alternatives you have to be weary as to the amount of risk you are willing to tolerate to avoid the eroding of your cash. I have CD’s that are ending soon and the renewal rates are much lower than what I was getting previously. If you are in a similar situation or just want to look at putting your cash in higher return investments read on.
Alternatives
Unfortunately there aren’t very many alternatives to consider that are safe enough for the cash portion of our portfolio. One option I am currently looking at is preferred stock. Preferred stock is like a hybrid stock/bond investment offered by many corporations. Many corporations are having the same problem home buyers are having right now, getting a loan. Offering preferred stock is a way to raise cash for many corporations. Preferred stocks pay a much higher dividend than normal stocks and have a higher priority when it comes to payment of those dividends. Another alternative is placing cash in the hands of a capitol management company in the form of a high dividend paying reit. One that looks attractive and that I have owned in the past is symbol NLY; with a yield over 6% per year it’s a lot better than any current short term CD offering. Also consider what I have mentioned in an earlier blog, P2P lending at prosper.
Consider
Consider what the investor group from Abu Dhabi has done investing 7.5 billion dollars in what is essentially a “super” preferred stock stake in Citigroup. Could this be a sign of what we could follow? Could this be a sign that the financials might be near a bottom? I personally am looking at the preferred shares of Citigroup which pays a nice dividend and I am already invested in Citigroup common stock which also has a good yield. There are many other preferred stock offerings out there currently with great yields, but, I would still be weary of investing in any preferred stocks that are exclusively in the housing sector. As always please feel free to email me AJSinvest@gmail.com with any questions.
Real World Money Management’s editorial goal is to provide a forum for personal finance and investment ideas. My blogs and other features should not be construed as investment advice. An investor's best course of action must be based on individual circumstances.
Right now is a tough time to be invested in cash. By cash I mean CD’s, money market accounts, government bonds, and actual cash whether it be under the mattress or in the bank. Interest rates are going down causing less return on cash investments and inflation is going up making that cash worth even less. The weakness in the dollar is also contributing to the need to find a better investment for the cash portion of our portfolios. In finding these alternatives you have to be weary as to the amount of risk you are willing to tolerate to avoid the eroding of your cash. I have CD’s that are ending soon and the renewal rates are much lower than what I was getting previously. If you are in a similar situation or just want to look at putting your cash in higher return investments read on.
Alternatives
Unfortunately there aren’t very many alternatives to consider that are safe enough for the cash portion of our portfolio. One option I am currently looking at is preferred stock. Preferred stock is like a hybrid stock/bond investment offered by many corporations. Many corporations are having the same problem home buyers are having right now, getting a loan. Offering preferred stock is a way to raise cash for many corporations. Preferred stocks pay a much higher dividend than normal stocks and have a higher priority when it comes to payment of those dividends. Another alternative is placing cash in the hands of a capitol management company in the form of a high dividend paying reit. One that looks attractive and that I have owned in the past is symbol NLY; with a yield over 6% per year it’s a lot better than any current short term CD offering. Also consider what I have mentioned in an earlier blog, P2P lending at prosper.
Consider
Consider what the investor group from Abu Dhabi has done investing 7.5 billion dollars in what is essentially a “super” preferred stock stake in Citigroup. Could this be a sign of what we could follow? Could this be a sign that the financials might be near a bottom? I personally am looking at the preferred shares of Citigroup which pays a nice dividend and I am already invested in Citigroup common stock which also has a good yield. There are many other preferred stock offerings out there currently with great yields, but, I would still be weary of investing in any preferred stocks that are exclusively in the housing sector. As always please feel free to email me AJSinvest@gmail.com with any questions.
Real World Money Management’s editorial goal is to provide a forum for personal finance and investment ideas. My blogs and other features should not be construed as investment advice. An investor's best course of action must be based on individual circumstances.
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