New Long-Term Commentary From WesCorp

Dwight is spot-on as usual.? Click over to read his thoughts.? Here is short quote that hits the?nail on the head.

The mess we are in didn?t happen overnight.? It took at least four years of hubris, greed, bad decision-making, and other assorted sins to create the credit monster.? A full recovery from the downside of that creation will also take years, not months.? But it has to begin somewhere and build slowly.? We think that process is beginning.?

Latest WesCorp Long-Commentary, Looking for Good News.

cd :O)

Best CD Rate – 11/28/07

Originally I was just going to update?a single post, but having a history will be more fun and helpful.

Our best personal CD rate?is 5.71% APY (10Y Term; No Fee). We also have a 1Y at 5.15% APR / 5.25% APY
Best Corporate rate is 5.01% APR for 1Y or the 10Y above.
Updated 11/28/2007.

Visit our Current Interest Rates to get started with our process. We do have a fee for our service.

Treasury Yields Dropped

Big drop in Treasury yields today.? The 2Y went from about 3.01% to 2.88%.? Most believe a big part of the buying spree was large investors seeking to cover other investments they had made.? But that wouldn’t account for all of the reduction.? The 10-year dropped to levels not seen since March 2004.? It was down to 3.84%.

Some believe it is a further flight to safety from other investment vehicles.? The continued drop will make it difficult for the Fed to not decrease rates again on Dec. 11.

Happy Thanksgiving

Most people say things better than me.? Here is a helpful hint from Dwight Johston at Wescorp.

Now, I’ll save you some time.? You don’t have to watch the news tonight, tomorrow, or Friday.? Tonight’s news will be wall-to-wall stories on travel?nightmares, with TV cameras across?America trained on the lines at airports.? Thursday’s news will be?the leftover travel stories, plus scenes of people carving and eating?turkey.? Friday’s news will be?endless shots of?masses of nutty people huddled in the dark and cold outside of Wal-Marts and Targets around the country?in the wee hours of the morning.?Those will be followed by scenes of jammed shopping malls.??So, there’s your news for the next three days.? Feel free to focus on the?important?thing in life – football.

Here is a great article from Caroline Baum over at Bloomberg.??Thanksgiving Is a Story of Pilgrim’s Progress?

Happy Thanksgiving everyone!?Have a great holiday.? cd :O)

Continued Show Down and Slow Down

Sorry I haven’t been as busy posting of late.? I’ve been working on our format for our Email Newsletter and thankfully been busy helping clients.?

But, the gloves are off.? It is the talking heads of Wall St. vs everyone else.? There is bad news to go around daily and each day it gets worse.? However, the talking heads keep trying to put a spin on it.? They keep saying it can’t get any worse, yet it does.?

These same talking heads said the mortgage problems would be contained.??They kept saying this even as companies failed and the Big Guys began hinting at huge losses.? Wall St. still wants us to believe the housing crisis is over.? But it isn’t.? Many of the ARMs people got into haven’t even repriced, yet.??There are still a very large number that will be affected in 2008, 2009, and 2010.

Foreclosures will continue, prices will continue to?fall and as a result the whole economy will suffer.? Many?also believe the Fed has a rate cut or two left in them.?

It isn’t all doom and gloom, but we have to be honest.? As I know many of you count on the interest from CDs for your income,?take prudent steps to protect your income and reduce expenses.??

• Bike or?walk when you can
• Pile on the layers and keep the heat down
• Turn lights?off when you aren’t in the room
• Eat at home more

If you have others leave them in the comments.

Here is a link if you want to subscribe to our CD Interest Rate Newsletter.

EmigrantDirect Savings Rate – Updated Dec 2007

EmigrantDirect?still has a strong savings rate at 4.65% APY.? ?This savings account works really well. You link the account to another bank account, such as where you do your primary banking, and you can transfer funds between the two accounts on-line.

The FDIC# for Emigrant Bank is 12054. They are over $11.5 Billion in assets.

Here is their website, EmigrantDirect

cd :O)

Why buy a 10-year CD?

Many people out there question the logic of buying 10-year CDs. And it is smart to question. Let’s examine some historical data and pose some reasons for and against. You can then make up your own mind.

Reasons for:

I want a stable, decent rate of return.

What is a decent return? Since 1992, the 15-year average rate on 3-month T-Bills has been 3.86%. For 6-months, it has been 3.97%. For 3-month 2nd Market CDs it was 4.24% and for 6-months it was 4.34%.You can view this data and more here.

Our database goes back to 1993. The average 6-month rate as of 7/31/07 was 4.401%. The average 5-year was 5.405%. So somewhat recent history would imply that a 5.70% for 10-years is decent and stable.

I have a well balanced and laddered portfolio.

If you don’t have all of your eggs in one basket that is a good sign. What the various baskets are, is based on your risk tolerance, goals, age, etc. When it comes to laddered portfolios, if you have funds coming due in the next 1-year, 2-year, 3-year, etc. you are well protected on that front. If rates go up, you can take advantage of those as your funds become available. If rates go down or hold, you have some funds on the longer end that are protected with a nice rate. But trying to time things is very difficult. Historical information is just good as a guide; it provides no guarantees of what the future will hold.

Reasons not to:

This is the only money I have.

Putting all of your money in any one investment vehicle isn’t prudent. So if $100,000 is all you have, putting it in a 10-year CD wouldn’t be advisable. If you are in your later years, and principal preservation is your goal, taking that $100,000 and putting some in savings to cover emergency needs and then ladder the rest would be a good plan. This is also similar to I’m just trying to learn to invest.

I’ll be buying a house, sending children to college, etc.

When is the big question here. If you plan on having any major expenses in the next 10-years, and you don’t have a very high reasonable expectation of having other means to cover them, don’t do a 10-year CD. Most longer-term CDs have a large penalty to close early and you don’t want to be in a situation where you have to break the CD. But, try to strategize (on the conservative side) when you will need the funds. Then ladder your investments out across different maturities. When each maturity comes up, reassess to see if you can maintain the maximum term you have set-up.

For instance, you set-up a ladder that has funds coming due every 6-months and the longest maturity is in two years. When the first funds become available, determine when you will need them. If the funds will be needed in the very near future, move them to a high yielding savings accout, if not invest in the term that fits your situation, eg., a 1-year, 2-year or even longer term CD.

cd :O)

10-Year CD Rate–5.71% APY

Our best rate on?a 10-year CD continues to beat almost anything out there except for extremely short-term specials.

Rate is 5.55% / 5.706% APY.? This is with an FDIC insured bank.? This is a net rate, no fees.? The bank is paying us to refer people directly to them.

Call us at 800-234-4605 or visit our main CD Rates site.

cd :O)