ING offering 2 year CD @ 4%

Discussion in 'Trading' started by Trend Fader, Jul 17, 2005.


    I think the 5 year CD will be over 5% within 1 year. Why would any long term investors want to hold money in the stock market or any hedge funds.. with guaranteed 5% returns. Right now most of my liquid savings is sitting in a 3.25% money market account.

    I think in 2006-2008 the stock market returns will be pittiful... alongside of a huge underperformance of hedge funds relative to simple fixed income.
  2. The prime rate is @ 6.25%... once we top 7% the refi easy money boom will be completely over and then I would love to see how the economy will react to this.

    Easy money days are just about over. The hedge fund quant boom was all about making guaranteed money.. around 10% a year.. which is great when fixed returns were around 3%.. but I am confident that when fixed rates are over 5-6% across the board.. the hedge fund industry will have a huge shakeout.

    What is the point of paying high manager fees.. taking a risk of an implosion.. to make a meager return that would be no better than a 5 year CD??
  3. yeah, I have been making that same argument. The Fed cutting rates to ridiculous lows was a catalyst for alot of money pouring into alternative investments, no matter how conservative the strategy of the fund manager. But as we have seen in 2005, even the so-called low risk funds have had negative returns.

    However, the flight to lock in 4-4.5% on the longer end of the curve is probably indicative of "smart money" betting on abysmal stock market returns going forward.
  4. 4-4.5%.. we are not even talking about bonds... we are talking about grannie cd's.
  5. because the markets will be up 20% in one year soon.

  6. LOL
  7. Since the original post was about where one could find higher yields, GE Capital (AAA) offers 3.5% (50k min) on demand notes. They give you free checks (3.56% APY).

    Nevada'a Silver State Schools Credit Union pays a 5% APY on a 3 yr CD ($500 min). The actual dividend rate is 4.86%.

    Pentagon Federal Credit Union also pays 5%
  8. Do you have to be part of the credit union to access those CD's? offers 3.25% savings account (no min, no junk fees).. which is the highest around.. and its FDIC of course.