Boulder City Magazine is a monthly publication full of information about Boulder City and Southern Nevada. Boulder City Magazine features the Boulder City Home Guide, a real estate guide to Boulder City and Southern Nevada.

Money Matters
by Wendell Whitman
Edward Jones

Investing Beyond Short-term CDs

As an investor, you’ll find that certificates of deposit, or CDs, offer at least two key benefits. First, the Federal Deposit Insurance Corporation typically insures CDs up to $250,000. And second, by purchasing a short-term CD, you don’t need to lock up your money for long periods. 

However, with CD rates as low as they are, you may need to consider some alternatives if you need more investment income.

One possibility is a fixed annuity. An annuity is designed to provide retirement income, but most annuities also allow you to withdraw up to 10 percent of your account value each year without penalty. Keep in mind, though, that annuities are not guaranteed by FDIC insurance and are backed instead by the claims-paying ability of the issuing insurance company.

Consult with a financial professional to determine if an annuity or another investment can help you boost your cash flow.

Know Your Investment Risks — and How to Respond

Stocks and bonds incur different types of risk — but how you respond to that risk may be similar in both cases.

When you purchase stocks, you own shares of a business. Stock prices always fluctuate, which means you risk losing some, or all, of your principal. But by diversifying and holding your stocks for the long term, you can help reduce the impact of market volatility on your portfolio.

When you invest in a bond, you’re loaning money to either a company or a governmental agency. In return, you receive regular interest payments. If market rates rise, then the value of your existing bond will fall, because no one will pay full price for it. You can reduce this interest-rate risk simply by holding your bond until maturity, when you’ll get your entire principal back, assuming the issuer doesn’t default.

Understanding risk, and taking steps to reduce it, can help you work toward achieving your goals.

Contact Wendell at Edward Jones www.edwardjones.com.




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