Comments for E*Trade Adds Easy Bond Laddering Tool

E*Trade Adds Easy Bond Laddering Tool

2009-11-18T18:30:00Z

E*Trade added a few tools to its bond resource center, the most useful of which seems to be its bond laddering tool. It makes it easy to ladder bonds by just clicking three drop-down boxes, "Start in," "end in," and "mature every." What's laddering you ask?

When you ladder an investment, like bonds or CDs, you purchase several units of the financial product, each with consecutive maturity days. So you might get 3 bonds, one which matures in 1 year, one in 2 years, and one in 3 years. This way you're guaranteed a reliable source of income. Or you could reinvest each one at 3 years as it comes due, so that you know you'll have access to cash on certain dates but still be growing your nest egg.

Personally I don't like E*Trade because it feels like the site is designed to look like a video game and thus encourage you to make more transactions than you might otherwise, but to each his own.

E*Trade

Comment from Ben Popken on 2009-11-18

2009-11-18T21:53:22Z

@H3ion: I don't begrudge them the right to design their system as they have. I myself personally just would rather go to Vanguard or Scottrade.

Comment from Mr.Duke on 2009-11-18

2009-11-18T21:53:21Z

@rjhancock:

t-bills and money market funds rates are to low when you figure in some inflation, dollar value decline and taxes owed on the interest, you basically are losing money.

Comment from Mr.Duke on 2009-11-18

2009-11-18T21:53:21Z

Normally, I would say having fixed income in your portfolio is okay. But not now. Except for riskier junk bonds, rates are super low. The Fed is printing paper money like madmen, flooding with world with dollars. When rates rise, bonds get kicked in the butt big time. Rates can't go much lower. Higher rates are in the future. At some point, investors are going to want higher rates to buy Govt. bonds. With our national debt out of control, credit risk becomes an issue. Finally, inflation is bad for bonds, too. ...

Comment from smartmuffin on 2009-11-18

2009-11-18T21:53:18Z

@savvy9999: Not to defend inactivity fees, but let's clarify a bit here.

You don't have to be a "day trader." You can avoid the inactivity fee by making ONE trade per quarter. That's really not so bad.

Granted, many of their competitors have no inactivity fee at all, so yeah...

Comment from H3ion on 2009-11-18

2009-11-18T21:53:18Z

@Ben Popken: But they make their money primarily from transaction fees because they don't do any underwriting per se. Why would you expect a dry economist approach when the entire purpose of getting you online is to generate income for themselves?

Comment from savvy9999 on 2009-11-18

2009-11-18T21:53:17Z

@diesel54: exactamundo. two biggest reasons to dump e*trade

1) ridiculous inactivity fees ($40 a quarter! for what? actually buying and holding, and not being already rich doing so?)

2) ridiculous time and effort (and possibly more fees) to get your money out and account closed. Took me almost 3 months and several dozen phone calls to eTrade to successfully get certificates issued for remaining securities and the balance of my cash account moved out of that hellhole.

Best part was when an 'advisor' I talked to offered to simply make my securities 'vanish' (meaning dump them into his own account), free of charge. What a pal.

My recommendation is to go nowhere near eTrade, ever.

Comment from Ben Popken on 2009-11-18

2009-11-18T21:53:16Z

@Javert: Making it look like a video game encourages people to treat investing like a video game, which it's not. I prefer a site like Vanguard that me want to go take a nap after I make my transaction, not play around with all the buttons and make more transaction than I might otherwise.

Comment from Oranges w/ Cheese on the move on 2009-11-18

2009-11-18T21:53:15Z

@tinyhands: Wow, you're fortunate to HAVE $50,000. You expect the rest of us to just produce that amount of money somewhere?

Comment from tinyhands on 2009-11-18

2009-11-18T21:53:15Z

@diesel54: Maintain a combined balance of over (don't quote me) $50,000 to avoid inactivity and account fees. I don't day trade either. I currently only have $9 in my brokerage account with them, but more than $50k across my checking account and IRAs, so no fees on any of the accounts. I love having all of these accounts in one place, all linked to one dashboard. When I want to buy something in the non-retirement brokerage account, I can instantly move money. When I sell, I move it back, aggregating cash into the highest %-rate earning account.

This is E*Trade after all though. My emergency fund is with another firm.

Comment from rjhancock on 2009-11-18

2009-11-18T21:53:15Z

It's all fine and dandy except, you are better off investing in proper money market funds that invest in cd's, bonds, and t-bills. You still get the interest from those investments AND you get near instant access to your money without penalties.

Comment from diesel54 on 2009-11-18

2009-11-18T21:53:14Z

@Javert: E*Trade's web developer was quick to show up this morning.

Comment from Javert on 2009-11-18

2009-11-18T21:53:14Z

"Personally I don't like E*Trade because it feels like the site is designed to look like a video game but to each his own."

This is officially the stupidest reason for not using a web site...ever.

Comment from ninja-meh on 2009-11-18

2009-11-18T21:53:14Z

E*Trade also screwed over my gf with the supposed 100 free trades and their fees are way too high compared to Scottrade's (when it's not free anymore).

Comment from ConsumerWho on 2009-11-18

2009-11-18T21:53:14Z

According to my broker at Scottrade, this is picking up in the industry, he said they are going to be doing this soon too.

Comment from diesel54 on 2009-11-18

2009-11-18T21:53:14Z

E*Trade screwed me over with inactivity fees. I didn't realize that they'd penalize me for not being a day trader. Scottrade is a little more bare bones but has been much better to me.

Comment from johnfrombrooklyn on 2009-11-18

2009-11-18T21:53:13Z

I find their baby commercials really stupid but somehow always end up laughing at them.

Comment from Thenameismaia on 2009-11-18

2009-11-18T21:53:13Z

This is actually a pretty cool idea, methinks.

Now if only I had a job so I could invest some monies in my nest egg...