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Buying Securities

Modeps

Modeps

Lifer
I informed a friend of mine about ING's 3% interest rates and he said to me "Why would I do that when I can make a lot more by investing in securities?"

My question is, is he right? Are securities a guaranteed higher yield than a for-sure 3% rate? I'm not even sure I understand what securities really are. I dabble a bit in the market, but I wouldnt consider myself an expert at all.
 
There are debt and equity securities, ie: Stocks and bonds.

Stocks certainly do not have a guaranteed rate of return. Bonds somewhat do, as long as the company is still around to pay you. But the greater the likelyhood a company is to be able to honor it at maturity, the lower the interest rate they pay you. There's quite a bit more to it though, I'd check out fool.com for some good basic info.

I wouldn't go buying individual stocks on your own, unless you know for sure they will be going up. In that case let me know 😉
 
Dabbling in the market and securities in general are a form of gambling. ING offers guaranteed and insured returns.

If you are young you should build a balanced portfolio of securities, bonds and savings. You might even want to buy some real estate. 😉
 
Securities are generally stocks or mutual funds. If you've dabbled in the market, then you already know they are a guaranteed high rate of return with no risk of losing money.
 
If youre investing for the long term put your money into funds(mutual and bond) and rela estate. If you want someplace to stash a couple grand that you need to be liquid, place it in ING.
 
ING is good for the short term like saving 1-2 years for a house, and to keep a couple of months living expenses in.

Long term if you buy and hold over years good stock index based mutual funds like the Vanguard VFINX S&P 500 index fund I always recommend, you will make much more than with ING with very low risk.

Even pessimists expect an S&P 500 fund to grow 4-5% a year if held for the next few years, the difference is that you're not guaranteed any specific return in any one year. One year a fund will lose 5% another it will grow 20%.
 
Originally posted by: Baked
I just dumped 100K in Orange Savings today.
Click to expand...
Assuming you're serious, why?

Even for the medium term you could put most of that into 1- and 2- year CDs to earn 3.45% and 4% instead of just 3%.
 
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