Staying the Course

August 22nd, 2011

Dont panic aliens arent coming Image

I apologize for the image, I just couldn’t help myself when I saw it. Don’t worry, the aliens aren’t coming and you don’t need to flee to the hills. As the title indicates, “Stay the Course!”

Panic is never a good thing. It often leads us to making rash decisions that we regret later. The stock market is volatile by nature. It will go down, back-up, down again, and back-up yet again. History shows that you have a high probability of coming out ahead if you stay the course. I’m not telling you to never sell a stock or that it is never the right time to move out of an ETF. What I am telling you is do your homework. Research your decision before you make it.

What I would say is find your governmental representatives office and demand “Take me to your leader!”. Sit down and have a nice chat with them. Let them know that just like you have make hard choices when your income drops (no cable, no new car, sell the boat, etc.) you expect them to do the same. The money isn’t there. Things have to be cut. And they should start with themselves. Maybe they can go out and get a 2001 Honda Accord instead of a 2012 Cadillac Escalade.

I realize I am a CD guy. So I included a link to some rates from Aurora at the top. At a different institution, we still have a 10-year at 3.35% APR / 3.40% 2.40% APY (and also a 7-year CD at the same level). It has a 1-year early withdrawal penalty. If closed after 2-years, you would net 1.47% and after 3-years you would net 2.13%. There is a fee for this CD, but all rates are quoted net of fees. With the Fed indicating they will keep rates low into 2013, this just seems like a good CD. You get income now and have a reasonable hedge against rising interest rates.

Feel free to leave any comments.
cd :O)

Image: africa / FreeDigitalPhotos.net

-- By +Chris Duncan

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