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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 78701  
Subject: Re: Alternative to CDs idea Date: 4/14/2011 5:02 PM
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Looks like I won't be buying a house this year and am seeking something pretty safe and stable but better than all the CDs ...

Considering parking some portion of cash in here; there is some price volatility but the yield is considerably better than a CD.

Is this money that you're planning to use for a down payment?
Umm...never mind...I just pulled up the yahoo quote for TLT. 52 week range from 109 to 88, currently 91. That's not "some price volatility", that's a 20% loss. Do you sall that "pretty safe"? I don't. Not if I planned to be taking the money out in the next few years.

TLT is 20 Year Treasuries. That's way too long a maturity for current conditions--unless you plan to hold it for 20 years. When interest rates finally start to rise, TLT will get hammered.
Taking your money and your down payment with it. 4.25% yield is not enough to take that kind of risk.

Stick your down payment money into a 2% CD and be glad that you'll still have it when you do buy your house.
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