CD rates are near 5%! If they go any higher will that affect the stock market?

[MarathonMike]

So far it doesn't seem to be affecting the markets too much, but if they go to 6 percent that's getting pretty close to the 9% long term average return on stocks. Will that drive investors to pull money out of stocks and into CDs?

 

[Rambunctious]

Just an aside.... I took five $50 bonds to the bank that I've had for decades and walked out of the bank with $1700 bucks yesterday...
Vegas here I come....

 

[Mr Natural]

When interest rates are low, stocks will grow.

When interest rates are high, stocks will die.

 

[jbrownson0831]

So far it doesn't seem to be affecting the markets too much, but if they go to 6 percent that's getting pretty close to the 9% long term average return on stocks. Will that drive investors to pull money out of stocks and into CDs?

I havent pulled anything out of stocks yet but bought two CDs last week to take advantage of the rate.

 

[Dekster]

So far it doesn't seem to be affecting the markets too much, but if they go to 6 percent that's getting pretty close to the 9% long term average return on stocks. Will that drive investors to pull money out of stocks and into CDs?

Maybe. Banks are pushing them but they are only 3.5% for 13 months and 3.25% for 6 months in my area

 

[fncceo]

They've been as high as 17%

 

[sparky]

one couldn't fill a thimble with my knowledge of stocks ~S~

 

[MarathonMike]

Maybe. Banks are pushing them but they are only 3.5% for 13 months and 3.25% for 6 months in my area

You can buy CDs based anywhere. I opened an account through BofA that has CDs from banks all over America and some foreign banks.

 

[Dekster]

You can buy CDs based anywhere. I opened an account through BofA that has CDs from banks all over America and some foreign banks.

I am aware of that. I am just pointing out that they are not that high at a lot of places. I don't much care for CD's. To me they are little more than well-dressed Christmas Club accounts.

 

[MarathonMike]

I am aware of that. I am just pointing out that they are not that high at a lot of places. I don't much care for CD's. To me they are little more than well-dressed Christmas Club accounts.

I didn't care for them either when they were 1%. Now that they are 4.5 - 5.0% I like them a lot.

 

[Harpy Eagle]

I didn't care for them either when they were 1%. Now that they are 4.5 - 5.0% I like them a lot.

They are a good alternative to keeping your safety net in a normal savings account.

We split ours 1/3 12 month CD, 1/3 money market mutual fund and 1/3 basic savings account.

 

[Blues Man]

CDs are a shorth term strategy.
Hell I can get over 4% in a high yield savings account without tying up my cash for months or years

 

[otto105]

So far it doesn't seem to be affecting the markets too much, but if they go to 6 percent that's getting pretty close to the 9% long term average return on stocks. Will that drive investors to pull money out of stocks and into CDs?

5%

Shit one can get 14% for owning NLY.

 

[Flopper]

So far it doesn't seem to be affecting the markets too much, but if they go to 6 percent that's getting pretty close to the 9% long term average return on stocks. Will that drive investors to pull money out of stocks and into CDs?

Increases in interest rates is usually viewed negatively by the stock market. However, there are many other factors that effect stock prices. One of most potent is investors view of where the economy and stock market is going to be in a year from now. The market is always looking at what may happen in the future, not what happened yesterday. However, if CD rates go to 9%, I would sell stocks and start buying bonds, the higher rates go, the more I would buy. Personally, I don't think we will will see 9%. We might see 6 or 7.

 

[MarathonMike]

CDs are a shorth term strategy.
Hell I can get over 4% in a high yield savings account without tying up my cash for months or years

I'm quite happy with 5% on my cash that I am not going to put into the stock market. Each person has their own investment goals.

 

[MarathonMike]

Increases in interest rates is usually viewed negatively by the stock market. However, there are many other factors that effect stock prices. One of most potent is investors view of where the economy and stock market is going to be in a year from now. The market is always looking at what may happen in the future, not what happened yesterday. However, if CD rates go to 9%, I would sell stocks and start buying bonds, the higher rates go, the more I would buy. Personally, I don't think we will will see 9%. We might see 6 or 7.

I agree CD rates won't reach 9%, I said if CDs get to 6% that gets close to the average long term yield of the stock market of 9% which could potentially take cash out of the market. That's all I was saying.

 

[Quasar44]

Just an aside.... I took five $50 bonds to the bank that I've had for decades and walked out of the bank with $1700 bucks yesterday...
Vegas here I come....

You can visit me
I only have 8 Weeks left

 

[Harpy Eagle]

5%

Shit one can get 14% for owning NLY.

They have cut their dividends, plus the values of your NLY shares is down 29% over the past 365 days

 

[otto105]

They have cut their dividends, plus the values of your NLY shares is down 29% over the past 365 days

Last dividend was 88-cents per share.

 

[Harpy Eagle]

Last dividend was 88-cents per share.

Depending upon when that was it that is around 5%