Investing

Certificates of deposit, historically a pillar of retirement income, now pay rock-bottom rates and have for five years. Surprisingly, many people still keep a lot of their money in them. That is unwise: CDs pay too little and inflation can outpace their paltry yields.

At best, use them as a safe place to park money temporarily. These bank-issued instruments pay you a fixed interest rate for maturities generally ranging from one month to five years. But even the five-year CD yields little more than 1%.

It’s easy to get caught up on the hot new exciting companies that always make headlines. But sometimes, the staid, boring blue chips are smart assets to keep for the long term.

Bitcoin, the digital crypto-currency that doesn’t have the backing of any government, is becoming a mainstream interest, and many investors are hoping to capitalize on its appreciation. While this is a fascinating topic, it is not a wise bet for your retirement savings.

My firm’s clients and prospective clients often ask us which direction the market is going. This is always an entertaining question – and some of our longtime customers already know the answer. While advisors can’t predict the future, they can help you prepare for it to make the best out of what the markets throw at you.

Shaky markets in recent weeks make some investors nervous. Are these temporary concerns? There are plenty of reasons for caution. Risks abound, from economic sluggishness overseas to our own slow growth.

In the financial markets, the summer usually means lower trading volumes and higher volatility. Interestingly enough, what is striking over the last six months is the definitive calm in financial markets. The volatility index, known as the VIX, is up a bit, yet still low.

Many analysts worry that the roaring bull market in U.S. stocks can’t go on for much longer. With the Standard & Poor’s 500 up roughly 120% from its March 2009 lows, they believe that some major correction is around the corner. But judging from past data, it is hard to conclude that we are at the end of the bull market.

Some indicators actually suggest the market may be picking up steam. The markets move in long term waves that could last decades, called secular bull and bear markets. During a long bull market, you can expect to see several temporary downturns.

All family businesses eventually meet one of three outcomes: sale, transfer or failure. Planning is crucial to successfully sell or transfer your business to a successor, but many business owners fail to do this.

A survey finds that 88% do not have a wealth building plan for the inevitable sale or transfer of their business, according to Scott Yoder, an advisor who is a business succession expert.

Money matters are complex and even scary. How you choose to approach finances mentally is key to mastering them. I call this “money mindfulness.”

It is difficult to deal with your finances on your own because the technical aspects can be bewildering. Investment options, taxes, interest rates and securities transactions in general are overwhelming for folks outside of the finance industry. Few of us understand the math necessary to handle our own money, even at a minimal level.

For some time now, I have warned about the crash that is sure to come when the Federal Reserve tightens monetary policy. We just got a glimpse of how bad it could be last month.

On May 22, Fed Chairman Ben Bernanke told Congress that the central bank might cut the pace of its bond purchases. Currently, the Fed buys $85 billion in government bonds and mortgage-backed securities.

Investor sentiment surveys tell us that today, with the stock market up since January, there is widespread optimism about future gains. When you hear that, be wary.

When markets move to extreme levels, smart investors often make their largest portfolio gains – by doing the opposite of the popular sentiment. Warren Buffet once said, “Be fearful when others are greedy and be greedy when others are fearful.”