Quote:
Originally Posted by toeser
"CDs which should never be purchased"
I disagree. It depends upon one's circumstances. Even with inflation, we have all the money we will ever need provided we just don't lose it. So, a few years ago when CD rates were much higher, I laddered out CD's for several years for 15-20% of my total portfolio just to have some money I didn't have to think about or worry about. The yields I booked were pretty much in line with A-AAA bonds, so why not?
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because most times, they are repackaged treasury bonds, in which the bank gets a cut, so you can do better with treasuries for the same time period. but if the CDs at that time had higher rates than similar risked debt, great, but I doubt that differential existed over a long period of time. There are always brokers taking a commission in many different ways. ie, zero commission means that you don't see a commission on your brokerage statement, but you might just get ****ty executions, and the broker takes his/her cut in price, which you would never see unless you compare all the time and sales at bid and ask prices. . . sometimes fidelity will execute in house if they deem it more profitable for them, in stead of in the market. I saw that today, I sold my options at the ask per fidelity execution, but that was not the ask in the market at the time. kind of the same as super market club price savings, where the savings is against a marked up price.
So good for you if you found a favorable pricing, and took advantage of it. if you are disagreeing with the word never, i would agree that the statement could be better worded for the few exceptions. However, over long periods of time, at banks, nothing is free or the best most competitive prices, their customer base is usually the least price discriminating.