Should You Invest in Stocks, Bonds, or a 5% CD?

#Morningstar  #PersonalFinance #RetirementPlanning
Tax- and retirement-planning expert Ed Slott delves into qualified charitable distributions and donating appreciated securities.
00:00 Introduction
00:24 Why Should Investors Avoid Overallocation to Cash?
02:31 Advantages of Bonds Over Cash
03:38 Advantages of Stocks Over Cash
04:24 How Should Investors Divide Their Assets?
06:18 Withdrawal Rates for Different Asset Allocations
07:53 Which Type of Retiree Should Own More Stocks?
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[@45414]

Much deserved shout out from Clark Howard (podcast) to Christine Benz this past week.

[@yohjijames1413]

Wow, no bot comments yet introducing some non-existent advisors. A small miracle

[@elmanmay]

MATH . . . $20,000 in a 5.25 CD = $1,050 [20,000 * .0525] . . . $20,000 in a $20 bank stock (1,000 shares) that pays $0.92 Dividend per share a year = $920 . . . and if that stock goes up $2 in price that is $2,000 in Capital Gain. [1,000 shares * 2] STRATEGY . . . Take the CD if you can't afford to lose what you already have , , , take the Dividend if you have extra cash to invest . . . BONUS , if the stock price goes up after a year (you took the Dividend) SELL and your risk is rewarded (hopefully) with Capital Gain.

[@guzzi95]

Non-Callable CD's are great when you don't have 20 years to watch the markets go up and down. I have 5 CD's and 2 fixed index annuities.. Plenty happy with those when we continue to see an unstable market.

[@bigkahuna3085]

You never talk or discuss MYGA's with binds or CD's

[@wa210]

This past year I took advantage of hefty CD yields. Last December took lump sum pension and put 90% in monthly laddered CD's. Did lock in a couple 18 month CD's @5.50%, and one 2 year CD @ 5.40%. Rate yields lately been dropping like a rock. Basically 60/40 split, and will nibble back into solid dividend stocks in 2024.

[@johns512]

So high yields are ephemeral? How about stock prices? Lol. A desperately indebted government must offer attractive yields or deal with high inflation. Stocks are at nose bleed levels. The chances of a 50% plus crash is very real. Not so much with short duration high quality fixed income. I will only buy equities based on fundamentals at bargain prices. That is prudent risk management.