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Good point. My guess would be that 90% or more of the public lacks the skill-set evident regularly on this forum. I’m convinced that a few here trade C/Ds, stocks & ETFs in their sleep at night. Things not only your wife but most would be uncomfortable doing. Certainly there is a wide variance here as well - but most would appear far above the norm.In reading the various recent posts regarding banks and brokerages, I assume everyone's spouses have the skill sets, to do all the financial transactions online, without your direct assistance? With regard to Schwab, there is no local Schwab office where we live, so everything related to Schwab is online activity. When I have attempted to "train/educate" my spouse to be able to conduct online activities, she gets frustrated and upset, because it is not simple to her. Her response to my educational efforts with her is: "Just write it down and if something happens to you, I will try to call the toll free number and do my best to figure it out". We do have a designated person with Schwab, that we can contact for our Schwab account, and he has requested that we visit him at his office, to discuss brokerage account details--he is located 2 hours away in Dallas, in a very congested setting. Making a 4 hour round trip drive to Dallas to meet and talk to this Schwab representative is not a very appealing activity for my spouse or me.
My spouse is "old school", familiar with brick and mortar banks that are close and convenient, with a real person she can visit and talk with regarding financial matters. Doing that online is intimidating to her, is complicated to her, and it is scary to her. But everyone's situation is different, and maybe your spouses are comfortable and able to do that online independently, without your assistance when necessary.
I can endorse CU as financial institutions, especially for their excellent customer service. I have dealt with them over the years. I never had large enough invested with them to worry about their balance sheet or how NCUA works. It seems they get into trouble far less than regional / community banks. Do your DD.
In the interest of full disclosure, I stopped doing business with them when cyber attacks of US businesses became more prevalent. Just my luck, a few years after I closed my account, Patelco CU had a cyber attack and my info was compromised.
https://www.sri.com/press/story/75-years-of-innovation-cash-management-account-cma/In 1977, Merrill Lynch took a gamble with a concept known as a CMA (cash management account). This blending of banking and broker services into a one-stop-shop for financial services ...
Probably valid observations "in general" but would not work for my wife, in times of bereavement, in Tyler, Texas. I have to work with the cards I am dealt, including my wife's rigid resistance to travel 2 hours, to meet a stranger at a brokerage, that she has no history with. I have an opportunity to use this specific Financial Advisor, who my wife knows and trusts, and that has a much greater odds of succeeding. We can talk in generalizations all day long on these threads, but individual posters have to decide on what will work, for their specific circumstancesOne should avoid bank or CU financial advisors. They typically have high commissions & push a narrow group of products or firms' own products.
A general salaried advisor at Fido or Schwab may offer better free, no obligation opinions.
Use banks or CU for banking services. Use brokerages for brokeragebankingservices.
FD, I have other "agendas" going on here beside the attractive Share Certificate/CD offering. I am trying to develop a "process" of setting up some local resources for my wife to use, in case I die and my wife needs to deal with financial life, in my absence. My wife hates investing, but loves CDs from experiences managing her parents CDs when they were at end of life. At the Kelley Credit Union, they happen to have a licensed Financial Advisor she would trust, because he is the son of an old friend she use to work with. For my own piece of mind, and to address some increasing anxiety my wife has with how to handle financial resources in my absence, this is a viable plan for her to learn more and be prepared to be successful without me.It looks to me that a big CU is a better choice for safety. I use Penfed for their credit cards. It is federally insured by the National Credit Union Administration.
I would not select a small CU for large amounts of Certificate of Deposit to get a small extra %.
It's similar to MM. In a very risky market, I have used Fed MM and not the highest paying MM who can be locked.
BaluBalu'I can endorse CU as financial institutions, especially for their excellent customer service. I have dealt with them over the years. I never had large enough invested with them to worry about their balance sheet or how NCUA works. It seems they get into trouble far less than regional / community banks. Do your DD.
In the interest of full disclosure, I stopped doing business with them when cyber attacks of US businesses became more prevalent. Just my luck, a few years after I closed my account, Patelco CU had a cyber attack and my info was compromised.
https://www.reuters.com/world/us/wall-street-close-jan-9-honor-president-jimmy-carter-2024-12-30/U.S. stock exchanges will close on Thursday, January 9 in observation of a national day of mourning in honor of former U.S. President Jimmy Carter, who died on Sunday at the age of 100.
The New York Stock Exchange and the Nasdaq announced the closures on Monday, a customary gesture to honor deceased presidents.
The Securities Industry and Financial Markets Association has recommended an early close on Jan 9 for the U.S. bond market at 2:00 p.m. ET/1900 GMT.
It is better to understand the basics and contemplate than to eat what product selling financial institutions feed us. (loop back to YBB's post re ratings and securitization). No disrespect specific to VanEck intended (I use their products.)
All the more reason to understand the difference between CDOs which caused the 2007-2009 financial crisis and CLOs which did not.Human beings need reminding the same thing every few years to protect them from themselves. By now, in the minds of many, GFC is just an acronym devoid of the depth of its true meaning.
https://www.nytimes.com/1983/09/27/business/baldwin-a-casualty-of-fast-expansion-files-for-bankruptcy.htmlThe Baldwin-United Corporation, the Cincinnati piano company that borrowed heavily to move into the insurance business, filed for protection under the bankruptcy laws yesterday [Sept 26, 1983] in one of the largest financial collapses in American history.
The company was a casualty of overexpansion, built on complex financial maneuvers.
https://www.csmonitor.com/1984/1010/101040.htmlThe problems came ... when companies like Baldwin began using SPDA assets to prop up nonrelated ventures. Partly for this reason, brokers and financial planners are learing to be more skeptical about insurance company ratings provided by A. M Best's ...
In an interview, [Mary Malgoire, a financial planner] and her partner, David Drucker, agreed that the SPDA is basically a good product - provided it is sold by a company with experience in annuities (preferably an insurance company) and provided SPDA assets are totally ''segregated,'' or kept separate from the rest of the company's business. This requires the investor to look into the company occasionally, look at annual reports, and find out how and where SPDA assets are invested.
Old_Joe, I have a very similar position on my Fixed Income positions. I have kept my CD Ladder at no more than 2 years, as I want my CD ladder to have ongoing CDs maturing pretty frequently, and have some liquidity issues better addressed with frequently maturing, short term CDs. I also have a wife who has very strong wish to have shorter term CDs in case she needs it "for a facelift"! Her way of saying that she may want a new car, a facelift, or surgery/treatment for one of the many "health related" issues we are monitoring closely! We also are dealing with a couple of Adult children and their families, who are continually needing financial support for health issues, losing jobs, needing money for an array of creative and surprising needs that crop up. In short, the shorter term CD ladder works fine for my situation, but may not be what others need, with their personal and financial situation.Our CD/Treasury ladder is only out to three years, but I'm 85 and don't want to go too far out. Our Schwab SUTXX MMKT is currently at 4.35% and falling, the CD/Treasury ladder is at 4.81%. I'm replacing CDs and Treasurys as they mature, which will gradually move out the ladder.
At the moment the allocation is CD/Treasury ladder 43% and MMKT 57%. The main difference that I consider between CD/Treasury ladder and MMKT allocations is the possible need for "instant cash" due to future major medical issues. If it weren't for that I'd put almost everything into the CD/Treasury ladder. When we were younger we never kept this kind of money in either CDs or MMKTs.
Thanks msf! I have a CD in my IRA account maturing in a few days. I am tempted to reinvest it in 2 year callable CD, treating it like a 6 month noncallable CD. If it is called, I think I will still be able to get a 4% replacement callable CD, and if it is not called then I am fine with that callable rate for the length of the CD.
Regarding MMs, I am expecting all categories of MMs to fall below 4% in 2025--I will continue holding MMs but may reduce the amount I will keep in them.
@dtconroe. a very prudent decision for someone not into risk/drawdown and who is not a trader. Regarding CLOs, what is conveniently not mentioned is like most everything else in Bondland they melted down too during the Covid meltdown. Investment grade CLOs from AAA to BBB had drawdowns from 10% to 30% while below investment grade drawdowns were 40% to 45%. As recently as 2022, while investment grade CLOs eked out a small gain (JAAA) of under 1% below investment grade lost money. The longest tenured bond fund primarily into CLOs ( an interval fund) lost money 4 years since its 2014 inception. In 2020 had a multi week drawdown of 30%. 2023 and 2024 just happened to be “the right place right time” for CLOs. I hold slightly under 50% in CLOs but I am more than cognizant of the risks. A substitute for cash they certainly aren’t.
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