CNN Business news is an oxymoron if there ever was one. I heard one of these "experts" tell people to seek out those attractive 4.21% certificates of deposit in these troubled times.
PROBLEM: They can cost you money.
EXPLANATION: First off, depending upon where you live, inflation is running at around 4% anyway. That means you are making a bargain .21%. But wait! There's more! If you let that thing mature, and collect your 4.21"% note, you get taxed on the money. Depending upon your rate, you will lose a fair chunk, to a good chunk, of your interest to the tax man as well.
So the scholar who was advocating this on national television was... Bueller? Anybody?
AN IDIOT. Or, perhaps, bought off.
Who, after all, benefits when you throw your money into a CD? Banks! They take the money, use it more wisely than you do, make a huge profit off of it, and then give you a little back for being a sucker and sticking it in their bank.
Yes, reactionary conservative who fears the market, change, and U2 (ask your grandkids... It's not the spy plane), you might think that this is a "safe" play. I would much rather trust their stocks than their depositary accounts any day.
Right now the banks, to make back some of the money that they have lost in the unknowns of bad mortgages are writing scads of new mortgages thanks to the panic that they started which forced the Fed to bring interest rates down. Interest rates come down, refinancing goes soaring as everyone wants a better deal to ride out potential bad times.
The banks will make out big on the refi. They will make out big taking a bunch of lemming money from people listening to Henny Penny on CNBC run around screaming "The Sky is Falling!"
Even if dividends at at some banks get cut, you are still making at least the 4%+ that keeps your money from shrinking short term, PLUS you have the growth of the stocks, which have been hammered flatter than a penny on a railroad track, to look forward to.
More on what to pick that beats this kind of bunker mentality investing in my next report.