I have 100k to invest short term. One option is to buy stock, results may vary. Another option is to get a 1 year CD at current rates which are around 4.5 - 4.8%. The last option is to pay off a large chunck of my mortgage princple, for which my rate is 4.85%. I have an interest only loan so this would substantially reduce my monthly payments and would give me a smaller principle when i need to refinance in 2 years. Thoughts?
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I like the Forex. You COULD make a lot of money in the short term and do….whatever.
I have been looking at technical analysis for a while now. Some days, I have made over $9,000 - practice account as I don’t have the funds to do this for real. That is $9,000 in one day.
The practice account started with $50,000. It can fail you if you don’t learn technical analyses and if you don’t practice first to find what works with what you are trying to accomplish.
CD is probably your best bet if it must be short term.
I would definately NOT put your money into the forex unless you plan on being a VERY active investor.
Have you looked at Countrywide’s Savings link account? It’s much like a money market and can be put in and taken out whenever you’d like. It’s completely liquid and has a rate right now of 5.25%.
Countrywide has been beat up quite a bit lately but Bank of America is buying them and will add a lot of stability and there’s always FDIC insurance up to $200k, so you’re safe…
Do the math.
Of the options you mentioned the greatest direct payoff is the latter of the bunch. However, talk to your accountant, because you can deduct the interest on that mortgage, so there’s a loss of deduction in that equation. Get the accountant to run the numbers for you and you’ll be informed. It’s an easy calculation for them.
Avoid risky stuff. The stock market and other “paper” trading are dicey, especially in an election year in a country at war.
You have “real money”, so don’t play it with “paper” assets - May as well go to ‘Vegas….
If you don’t HAVE to turn it back into cash in exactly a year (if so, run the math of CD against the math of mortgage-pay-down) - Consider watching the real-estate market, which is bottoming sometime in the next 9-18 months or so. A sound maneuver there may not be very liquid, but it’s very secure.
A quick way to cash from real-estate is to find a house with property that’s “splittable”. Grab the package, then split the house and sell it, gathering all or most of your capital back up - and owning outright the vacant land, which will be minimal upkeep as it accrues value by the year. And, an idiot predident won’t cause a market problem that will permanently flush your funds.
Good luck.
You have a mortgage for 4.85%? I’d keep that until it’s rate changes and when it does pay it off. Buy a CD which matches the time frame of your mortgage changing its rate. Do not invest in stocks unless you don’t need the money for 5+ years!