CD’s: Not What You Think

 What they are and how they work

Bank pays a fixed amount of interest for a fixed amount of money during a fixed amount of time.

 

 

Benefits

  • No risk
  • Simple
  • No fees
  • Offers higher interest rates than savings accounts.

Trade Off

  • Restricted access to your money
  • Withdrawal penalty if cashed before expiration date (penalty might be higher than the interest earned)

Types of certificates of deposit

1. Rising-rate CDs with higher rates at various intervals, such as every six months.

2. Stock-indexed CDs with earnings based on the stock market.

3. Callable CDs with higher rates and long-term maturities, as high as 10–15 years. However, the bank may “call” the account after a stipulated period, such as one or two years, if interest rates drop.

4. Global CDs combine higher interest with a hedge on future changes in the dollar compared to other currencies.

5. Promotional CDs attempt to attract savers with gifts or special rates.

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5 Hottest Stock Markets

cropped-beddd.jpg#5 Philippines growing by +20%

According to cnnmoney.com the iShares MSCI Philippines Inevitable Market Index ETF (EPHE) has raked in more than $180 million this year, and is up almost 20%. The country has also earned and investment grade. I would dip my entire foot when it comes to investing in Philippines.

#4 Kuwait growing by +23%

Despite its strong economy and its vast resources of oil its situated in a very volatile region but I would still dip my foot toe in just not the whole foot yet.

#3 Argentina growing by +27%

I am not sure about Argentina but if you find a good deal in an investment I think this would be it. Just remember to take extreme caution and think long-term.

#2 United Arab Emirates growing by +28%

I would dip my entire foot when it comes to investing in UAE. It has a strong economy, hot real estate and a lot of oil. There’s a lot of money going into the UAE why not be part of it.

#1 Japan growing by +34%

It’s the third largest economy in the world. Strong currency and stable government. What more can I say; I love the idea of investing in the Japanese economy.

Click on the picture to read the full cnnmoney.com article on the world’s 5 hottest stock markets.

Glossary Terms & Google

                                                                                Yield – The interest or dividends received by a shareholder from a stock

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variable interest rate –An interest rate that fluctuates based on market changes.

variable expenses – Expenses that change in price and frequency each month.

hat fluctuates based on market changes.

Thrift banks – Financial institutions t

hat specialize in home and small business loans.

Tax-deferred growth – Growth in which income taxes on investment earnings are not payable until the money is withdrawn.

Tax exemption – A factor that reduces or eliminates a person’s obligation to pay tax.

Stock market index – An index based on a statistical compilation of the share prices of a number of representative stocks.

Securities Act of 1933 – A law that demands accurate information be disclosed to investors to help prevent fraudulent and misleading investments.

Securities Exchange Act of 1934 – Ensures that transactions are regulated and follow specific criteria.
Securities Investor Protection Corporation (SIPC) – Insurance on investments offered by the government.

Securitized loan – A loan that is protected by collateral to ensure loan repayment.
self-employment tax – An additional tax that self-employed individuals pay.

On a side note according to cnnmoney.com “Trying to predict when stocks will go up or down? Google may have the answer.New research publish


ed in the journal Scientific Report shows that you can use Google Trends to track the search volume of important financial terms, which can indicate whether markets are set to rise or fall” Click on the picture to read the full article.
Despite such headline I would use my investment philosophy of investing long-term, never investing more than what I can lose and lastly avoid trends or what I call ‘ fashion stocks’
.

The iUniverse

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me bagWas looking at todays financial news and came across a story written on CNNMoney.com. The article was about how Apple is partnering with Volkswagen to create the iBettle; that's right a car centered around your iphone. For the Apple fanatics iBettle is great as it becomes just one more thing to extend your interaction with your iphone. This is also good news for investors as I am sure it will increase the value of Apple. An increase in the value of the company could mean increase dividend. The story of Apple is just starting and if you havent invested in the company than maybe now is the time to do some research to see if it fits into your long-term investment goals.

The article goes on to say that "How is this different from pervious iPhone-auto integrations? Volkswagen is releasing an app that supercharges what the iPhone can do inside the vehicle. One part of the program displays vehicle information, such as coolant temperatures and oil levels. Another can compare driving times and distances. It also pipes in tunes from Spotify or iTunes and, natch, makes calls that can be run through the car's stereo too."

Other product that people have been talking bout Apple creating are television and watch. I wouldn't be surprised if somehow Apple gets into integrating the use of its products on shoes, glasses or piece of clothing. The future seems limitless for Apple.

Prom Planning

I found this app in the Apple store and found it interesting. The app is called Plann’It Prom and was created by VISA Inc. According to the description “Plan’it Prom is the definitive prom planning and budgeting app for students and parents, incorporating a prom count down, timeline, budget calculator and budget health meter into a layout that is fun and easy to use.With Plan’it Prom, you can cut costs and stick to your planned budget while maintaining a fantastic prom experience. Looking great and feeling great does not have to hurt your bank account.Simply enter your prom date and budget to gain quick access to cost cutting tips, social sharing options, photo gallery and a customizable user experience that will help you cut costs for a night you’ll never forget ” My prom wasnt too expensive but would have used it if I had something similar to this on my phone.  For those newbies going to the prom this app is definitely a gift. Please click on the picture and go directly into the apps webpage.

Hot Four

DFE
WISDOM TREE EURO Small Cap Dividend

Currently trading at $41.91. The star rating is three according to Morning Star. According to MerrilEdge “The Fund seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Europe SmallCap Dividend Index. The WisdomTree Europe SmallCap Dividend Index measures the performance of small-cap companies incorporated in Western Europe that pays regular cash dividends on shares of common stock”. I think it’s a worthy stock to look at because it pays investors money and it expands your investments so that you aren’t rallying solely on the American market. European Union is a big market why not tap into it.

AUSE
WISDOM TREE AUSTRALIA DIVIDEND

Currently trading at $64.33. The star rating by Morning Star is four. The objective of this fund is “The Fund seeks to track the price and yield performance of the WisdomTree Pacific ex-Japan High-Yielding Equity Index. The WisdomTree Pacific ex-Japan High-Yielding Equity Index measures the performance of the highest dividend paying stocks within the WisdomTree Pacific ex-Japan Index “. The dividend provided is $0.95. I love the high dividend provided by the stock and its objective. It also expands investment exposure.

QQQ

POWERSHARES QQQ TRUST SR1

Currently trading at $69.48.The star rating by Morning Star is five. The dividend provided by QQQ is five. The objective of the fund is The Fund seeks to provide investment results that generally correspond to the price and yield performance of the component securities of the Nasdaq-100 Index. I like the high rating given to the fund, it’s a good long term investment and it provides dividends.

 JNK
SPDR BARCLAYS HIGH YIELD BD FD ETF

This is a bit of a risky fund because of its low rating and the dividends have decreased over the years. It’s currently trading at $41.33 and the star rating is two. The objective of this fund is the following “The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of an index that tracks the U.S. high yield corporate bond market.“However, if you want to diversify your portfolio by getting into more than stocks and mutual funds this might be it.

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Know These Terms

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me bagThe following terms are some good ones to remember when dealing with any financial product so that you can make educated financial decisions.

Capital: Wealth in the form of money or property.

Capital gains: Earnings from the sale of an investment.

Collision insurance: Auto insurance that covers definite costs if your vehicle is damaged.

Compound interest: Interest calculated on both the principal and the accumulated interest.

 Contribution limits: Maximum legal limit on contributions to a specific account.

 Executor: A person or institution chosen to carry out the terms of a will.

Investment portfolio: A variety of investments held by a person or organization.

 Investment strategy: A set of rules or actions to guide an investor’s selections

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Apple and My App

 

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Downloading the app you will get a lot more than my posts. It will also make it easier for you to navigate information I provide. Another way to get the app is to simply snap a picture of the QR code provided at the bottom right of this post.This morning I got some really good tips about building wealth which I follow religiously. The first is to get a Roth 401(k) and second do not cash out once you have funds in it.

Hot Stocks

Photography by Nicholle La Vann

CNNmoney.com released their top ten hot stocks. I would agree with their listing of Apple which is currently trading at $404. Apple is a company which fits perfect into my investment philosophy because its products are used everyday and it’s a good long-term investment. Another one is Ford Motor which is currently trading at $12.89. Ford Motor is a good long-term investment and as we use alternative sources of fuel for transportation Ford could gain more value.Google is another hot one listed by CNNmoney.com; Google breaks a bit from my investment philosophy because it doesn’t produce anything physical in value. However, its a company that is used by almost everyone in the planet and its a long term investment. GE or General Electric is a great company to look into. GE is a technology company that offers many essential products for our world.  IBM and Sprint were also listed but I am not too sure about them. Click on the picture to see the full CNNmoney.com article. Scann the QR Code in the bottom left to get the app for this blog; You will get a lot more than my posts.