Behind the Scenes

Many clients don’t realize the amount of time we spend researching both the equity and fixed investments we use in our portfolios.  As money has moved out of equities into fixed income, yields have turned upside-down and interest rates have dropped.  The selection process has become much more involved.

We review our inventory of bonds and certificates of deposits daily, looking at interest rates as well as credit worthiness of the issuing banks, municipalities or companies.  For CDs, we go to bankrate.com and select only institutions with the highest quality ratings.  We also look at what interest rates the local banks are offering compared to what we have available.  When considering CDs, we look at the amount of money we are placing with each bank and make sure we do not exceed the coverage offered under FDIC.  The increased FDIC insurance of $250,000 per registration, per bank will expire December 31, 2009 unless revisited by Congress.

Clients have different timeframes and cash needs and all of this has to be taken into consideration as well.  What may seem like a simple selection process is much more involved, especially now.

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