The Really Reallies

Enough pontification. You get it. Save, save, save. That's the road to riches.

Now how do you get the savings to work for you? Stocks, Bonds, Real Estate or CDs?

My choice right now is CDs. You can get 5-6% for 1-2 years. That's no risk and FDIC insured. I'm loading up on these. Almost all of my IRAs are invested in CDs ranging from 4.1% (unfortunately I started getting CDs in mid-2005) to 6.0%. Yeah I know, interest could go up to 10% and I will lose out. Yes that could happen. But I'm only locked in for 2-5 years. And then I get my money back. I prefer to use a brokerage account. My favorite discount brokers are TD Amreritrade and Schwab, both of which I have been with for over 10 years. Schwab service did decline when the founder left. But he has returned and they are improving.

I have stocks, primarily through a financial advisor. Personally, I like to invest in stocks but I trade too much. My financial advisor keeps me in the market through thick and thin. Me, I like to buy a depressed stock and sell when it bounces. I've been with the financial advisor 2.5 years. In year 1, the advisor outperformed me at 6% vs. 3% for me. In year 2, advisor underperformed me at 3% vs. 7% for me. 75% of my stock investments are with the advisor.

Overall, I think the market is pretty weak, in spite of the rally the last two days. I plan on selling into this rally. If I am wrong, my advisor will keep me fully invested. If I am right, 25% of my stock accounts will benefit. Favorite longer term bet, Google. Full disclosure, I own Google. Favorite out of favor sector, Biotech. I own Alcon, Barr Labs, and Gilead. I own Genta as a speculative Biotech. My CEO bet, Apple. I like their innovations and products. I also own Apple. To note, all of these stocks are down from my original purchase price last year. So please do your due diligence.

Bonds are also a pretty good deal. I am buying insured municipal bonds from my state. So the interest is completely tax free. I am getting between 3.5% and 4.2% tax free. (Did I mention I like use all legal ways to defer or avoid paying taxes?) I have about 15% of my investments in bonds.

Real Estate. My first comment is that your house doesn't count. Not unless you plan to sell it and move to a less expensive house. I think real estate works if it generates income and you buy at a good price. Every piece of property I 've looked at is overpriced. I have noticed that the number of sheriff sales is going up and some are happening in high priced (>$350,000) neighborhoods. Hmmm .....

This is not financial advice. Please consult a professional advisor.

Copyright © 2006 Achievement Catalyst, LLC