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Show C M Y K February 26, 2009 Create a Strategy for Maturing CDs Article Provided by Brandon Henrie, Financial Advisor for Edward Jones Investments. Some things, like fine wines, get better with age. But a certificate of deposit (CD) is not one of them. If you have a maturing CD, you need to decide what to do with it — and the earlier you make this decision, the better off you’ll be. So if you’ve got one or more CDs coming due in the next few months, start planning now. Of course, if you had a specific goal for a maturing CD — such as a college tuition payment — your decision has already been made. But if you’ve purchased a CD for another reason, you’ll have to choose whether to renew it or invest the proceeds elsewhere. If you bought the CD for the income it provides, you may want to renew it. If prevailing interest rates are the same, or higher, than the rate on your maturing CD, you can purchase a new CD without worrying about reducing your income stream. But if rates have fallen, you may have a dilemma: How can you reproduce the income you received from your now-matured CD? Here are a few alternatives to consider: Purchase a bond that pays a higher rate. Instead of buying another CD, you could possibly purchase another fixed-income instrument, such as a bond, that pays a higher interest rate. Be aware, though, that if you find a bond that pays a higher rate, you may be taking on more risk, so make sure any bond you purchase is considered “investment grade quality” by the independent rating agencies. Buy a longer-term CD. Generally speaking, you can get a higher interest rate when you purchase a longer-term CD. Your money will be locked up for a longer period of time, but it will help provide you with a more stable income stream over time. Create a fixed-income “ladder.” To combat interest-rate concerns, you might want to build a fixed-income “ladder” by buying several CDs or bonds with varying maturities — short-term, intermediateterm and long-term. When market rates are low, you’ll still have your longer-term vehicles earning higher interest rates. And when market interest rates are high, you can reinvest the maturing short-term bonds and CDs at the higher rates. Thus far, we’ve talked about replacing a maturing CD to protect your income stream. But if you bought a CD for another purpose — such as removing some of your money from a volatile stock market — then the CD’s maturity gives you a chance to re-evaluate your investment strategy. As you know, 2008 was a tough year for the stock market, so, at the time, diverting some of your money to a CD might have seemed smart. But history tells us that even the worst bear markets don’t last forever, and that the biggest gains in a rally often occur at the early stages. Consequently, you may want to take this opportunity to “rebalance” your portfolio, and, if appropriate for your individual situation, look for ways to invest the proceeds of your CD into quality equities or other securities. By planning ahead, you won’t feel rushed to make a hasty decision when your CD matures or, even worse, be tempted to spend the money and have little to show for it. Your maturing CD can help you achieve your financial goals — if you give it a chance. Page 9 The Garfield County Insider C M Y K C M Y K Do-it-yourself Kitchen Projects Add Equity A kitchen is one of the most used and important areas in a home. Even as home prices across the country decline, a kitchen remodel can still add value to your home. According to the 20082009 Cost vs. Value Report (a joint study done by the National Association of Realtors and Remodeling magazine providing national and regional averages) kitchen remodels rank just after siding and window replacement in return on investment. A few simple do-it-yourself projects in your kitchen can update the space without the expense of hiring professionals. Plan ahead, rent the right tools and get advice in order to complete your project on budget and on schedule to enhance the value of your home. One way to reduce costs associated with DIY projects is to rent the tools you need from an American Rental Association (ARA) member rental store. Renting gives you access to all types of tools, including specialty tools that may be too expensive to purchase and too large to store but are necessary to finish the job successfully and professionally. ARA member rental stores are also great resources for expert advice on which tools you need, how to use them correctly and safely and how to best complete your project. Here are some DIY project ideas to get you started. Update the flooring Adding ceramic tile to an outdated kitchen is a simple way to increase the value of your home. Rent a wet saw to make cutting the tile easy and the finished product look professional. Your ARA member rental store can teach you the basics of using a wet saw, as well as safety issues and tricks of the trade. Take advantage of their expertise to tile like a pro. Remove wallpaper Remove dated and dirty wallpaper. With the right tools, such as a steamer, the paper often just peels off. This machine is easy to operate and can be rented. It has a steam tank and a plate that emits vapor as you hold it to the wall, which usually loosens even the stickiest paper in about two or three minutes. Once you have removed the wallpaper, choose a neutral paint color. Create a pass-through A pass-through can add light and openness to your space. Draw an outline of the opening on the wall then remove enough wall material to locate any electrical, plumbing or gas lines. Once it’s safe to proceed, rent a reciprocating saw to cut through the drywall, studs and nails. Renting an electric drill and nail gun to rough-in the opening and add trim creates a professional, finished look. Add crown molding This small detail adds an aura of luxury to your kitchen, and with the proper tools and instruction, it can be easily done in a weekend. Rent a compound miter saw to make the perfect cuts, and a nail gun to attach the molding. Ask your ARA member rental store expert for tips on cutting the corners correctly to avoid wasting materials. ADS ARE TOOLS TO HELP YOUR BUSINESS MAKING MORE PROFITS! LET US HELP YOU! We know the difference between wasting precious, hard earned advertising dollars, and creating revenue results for your business. Call us to set up a time to consult with you on how you can increase your bottom line. C M Y K IT’s what we do. Call Ryan at 676-2621 |