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To: JoanP who wrote (83824)3/21/2001 10:57:35 PM
From: Don Lloyd  Respond to of 436258
 
Joan -

...One concern, however, is that my CMA is only FDIC insured to $100,000.00. My cash exceeds this limit at present. Prepaying the mortgage would reduce the CMA balance to fully insured levels. CMA yield: 5.16% APR.

Where would you go from here?

I would not be inclined to make the FDIC limit a primary part of my planning concerns for the following reason :

If the CMA were to fail, that would likely be accompanied by a general economic collapse of some kind or war and the FDIC insurance would turn out to be an illusion for all practical purposes. Either the insurance payouts could not be made, the money economy could have disappeared, or the purchasing power of money could have collapsed. For these events, the appropriate insurance is likely to be the physical holding of a quantity of gold and silver bullion coins, but that is just an opinion off of the top of my head.

Regards, Don



To: JoanP who wrote (83824)3/21/2001 11:47:57 PM
From: Alias Shrugged  Read Replies (1) | Respond to of 436258
 
Acknowledging that there are few risk-free courses of action, consider taking a small portion of your investable assets and doing "buy/writes" on a collection of beaten up yet fundamentally sound companies. You would buy common stock, like NEM at $17, and immediatley write Jan 03 calls (in the case of NEM, perhaps 1/2 at the 17.5 strike and the other half at 20.)

This will be a good strategy using QQQ - but the Qs have to drop to 15 first!! -gg-


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