Investing Beyond Short-Term CDs

Stephen Gerrald, Financial Advisor

Many people depend on certificates of deposit (CDs) to provide extra income. Yet CD rates have been fairly low for a while. In recent months, in fact, one-year CDs were paying about 0.5%, two-year CDs topped out at around 1%, and five-year CDs paid in the 2% to 2. 3% range. Those rates are scanty enough, but they can seem even lower in an economic environment marked by rising food and gas prices.

Before you consider alternatives, keep in mind that CDs still offer a key advantage:  safety of principal. The Federal Deposit Insurance Corporation (FDIC) typically insures CDs up to $250,000. And since CDs are relatively short-term in nature, you don’t have to worry about locking away that money for long periods of time. So there can be a place for CDs in the fixed-income portion of your portfolio.

However, during times such as these, you might consider looking at additional options, keeping in mind that, when seeking greater income, you’ll likely be taking on more risk. Let’s consider a few alternatives:

• Fixed annuities — Many people buy fixed annuities to supplement their retirement income. But most annuities also allow you to take up to 10% of your account value each year without penalty. Plus, the interest rate you receive on a fixed annuity may be more competitive than that currently paid by a CD. Keep in mind, though, that annuities are not backed by FDIC insurance, and any guarantees are backed solely by the paying ability of the insurance company. Additionally, early or excessive withdrawals may be subject to penalties. If you believe a fixed annuity might be appropriate for your situation, speak with your financial advisor.
• Bond ladders — If appropriate for your situation, you can potentially gain extra income through a strategy known as a bond “ladder.” To build a ladder, you buy several bonds with varying maturities — short-, intermediate- and long-term. Once you’ve constructed your ladder, you could gain some advantage in various interest rate environments. When market rates are low, you’ll still have your longer-term bonds earning higher interest rates. And when market rates rise, you can reinvest your maturing short-term bonds at the higher rates. But if you need income in addition to your regular interest payments, you can get it from the maturing bonds. Unlike CDs, however, bonds are not covered by FDIC insurance and are subject to credit risks. Bonds are also subject to interest rate risk: When interest rates rise, bond prices generally fall, and you may lose some or all of your principal if you sell your bond prior to maturity. But by holding your bonds until maturity, you can avoid loss of principal, assuming the issuer doesn’t default.
• Dividend-paying stocks — Some companies have paid — and increased — their stock dividends for many years now. If you don’t need the dividends to boost your cash flow, you can reinvest them to help boost your ownership stake. However, companies can reduce or discontinue their dividends at any time, and since stock prices fluctuate, you risk losing some or all of your principal.

By exploring alternatives to short-term CDs, you may find other appropriate investments that may better position you to reach your financial goals — so look around to see what’s available in the financial marketplace.

Stephen Gerrald has been a licensed Financial Advisor since May of 2007. Originally from Nacogdoches, Tx, he is happily married to Mandy Gerrald from Savoy and lives in Faught. He is an Accredited Asset Management Specialist (AAMS) and graduate of Stephen F. Austin State University with an emphasis in Finance. Stephen is active in his faith in Christ, a member of the Greater Paris Rotary Club, active in the Lamar County Chamber of Commerce Ambassadors club, a big brother with Big Brothers/Big Sisters, and serves on several non-profit boards in the area including Lamar County Chamber of Commerce, Lamar County Human Resource Council, Lamar County Leadership Board, Big Brothers/Big Sisters, Greater Paris Rotary Club, and Footprints of Charity. He is a graduate of the Lamar County Leadership Class of 2008-2009

29. Let's Rodeo – Ranch Style

On Friday June 11th, the 22nd Lamar County Crime Stoppers Ranch Rodeo comes to the Paris Rodeo and Horse Club Arena at the Fairgrounds.  So what’s a “Ranch” rodeo?  A Ranch Rodeo is an event that directly reflects our Texas cowboy heritage as a competition based on what real cowboys do on real Texas ranches.  The cowboys and their horses complete in five events that showcase the necessary skills and know how ranch hands practice daily on today’s Texas ranches.  The Ranch Rodeo’s events require the same teamwork ranch hands use in their everyday lives.  Ranch rodeos do not include bull riding, barrel racing or bulldogging, which are not considered typical ranch activities.  The events are:

• Remuda Race
• Cow Milking
• Team Penning
• Double Mugging
• Trailer Loading

You can probably figure out what cow milking is but how about the rest?  A remuda race is where the cowboy ropes a horse from a remuda or string of ranch horses and then rides like crazy for a while.  These standard events are usually supplemented by several imaginative and often wild stunts which the cowboys think of themselves. 

Double Mugging is kind of like calf branding, but instead of a calf, the team of cowboy has separate a big yearling or roping steer from a group, rope it and get it down on its side in order to tie three of its four legs and keep it down for 6 seconds.  It typically takes the whole team to get this big cow down.

Team Penning is where a herd of approximately 30 head of cattle a put at one end of the arena; a team of cowboys draws a number at random which is writte on 3 of the 30 head.  Cowboys have to ride in and cut out those 3 specific cows and herd them into a portable pen set up in the center of the arena.

Trailer loading is where a cowboy has to cut a cow out of a herd and get it loaded into a trailer for time.

This is a great way to see the the skills practiced everyday on Texas Ranches and done for a great cause.  All proceeds go to fund Lamar County Crime Stoppers.  This event is put on with the help of great corporate sponsors Campbell Soup and Toyota of Paris.

What's wrong with Paris? Ten of 15 City of Paris department heads live outside the city

By CHARLES RICHARDS

eParisExtra.com

For some weeks, I’ve been promising some people that I’d write a story about City of Paris employees – particularly about how many of them live in the city vs. how many live elsewhere in Lamar County.

With the May 14 city election just behind us, I thought I would also report on how many voted vs. how many didn’t.

Acting city manager Gene Anderson

So this is what this column is about.

First, this disclaimer: the data isn’t current.

How far out of whack it is, I don’t know.

I sent an e-mail to acting city manager Gene Anderson requesting a list of city employees, and he replied by e-mail: “You will need to do an open records request.”

So I went down to city hall and filled in a Public Information Request. The city is required to provide this within 10 days.

On Thursday, May 19 – nine days after I requested the list – city clerk Janice Ellis called to tell me that the list was ready for me. I picked it up a few minutes later, and so my research began.

The employee list has 352 names – but it includes several names of people who no longer work for the city – people like former assistant public works director John Brunson, whose job was eliminated about 18 months ago; police officer Sam Owens, past president of the police union, who left the Paris Police Department about six months ago; and Alice Pinalto, who retired four months ago as a secretary in the city attorney’s office.

New people NOT on the employee list include new public works director Ron Sullivan and new human resources director Sandy Collard.

Former city manager Kevin Carruth is among those still on the list of City of Paris employees.

I don’t know what other former employees are still on the list, or which new names should be on the list and are not.

Having made that disclaimer, let’s proceed with my findings. The findings won’t be exact, but the trend is valid.

     —

While the May 14 city elections are still fresh on our minds, here’s a quiz on which city department heads voted and which didn’t – and which live in Paris and which don’t.

Ten of the following 15 department heads don’t pay city taxes – because they don’t live in the city.

1.  Finance director and interim city manager Gene Anderson. He couldn’t vote in the May 14 city elections because he lives in Reno – which also means he doesn’t pay any city taxes.
2. City attorney Kent McIlyar. He lives in Paris (District 7), and he voted. (He’s one of just 22 city employees who made it to the polls for the May 14, 2011, city election.)
3. City clerk Janice Ellis. She couldn’t vote, because she lives in Powderly. (That means she doesn’t pay city taxes.)
4. EMS coordinator Kent Klinkerman. He lives in Powderly, too, which means he doesn’t pay city taxes, either, and he couldn’t vote in the city election.
5. Human resources director Sandy Collard: She couldn’t vote, because she lives on a county road north of Reno. She doesn’t pay city taxes, either.
6. Fire chief Ronnie Grooms. He’s registered to vote, but not in the city because he lives near Lake Gibbons northwest of Paris. He doesn’t pay city taxes.
7. Police chief Bob Hundley. He couldn’t vote, and he doesn’t pay city taxes. He lives at Powderly.
8. City judge Thomas Hunt. He lives in Paris (District 4), and he voted.
9. Library director Priscilla McAnally. She lives in Paris, and is registered to vote (District 5), but did not vote in the city election.
10. Parks supervisor Bill Loranger. He couldn’t vote, and he doesn’t pay city taxes, because he lives near Faught.
11. Recreation supervisor Sally Wright. She couldn’t vote, and she doesn’t pay city taxes. She lives at Powderly.
12. Sanitation supervisor and traffic division supervisor Edwayne Samis. He lives in Paris and is registered to vote (District 3), but did not vote (although his wife did).
13. Street superintendent Rufus Hill. He lives in Paris and is registered to vote (District 7), but did not vote.
14. Director of utilities Doug Harris. He couldn’t vote, and he doesn’t pay city taxes. He lives in Hugo, Okla.

Of the 352 people on the City of Paris employee list provided to me:

• 147 (41.2 percent) live in the city
  • 22 voted in the city election
  • 100 more were registered to vote but did not vote
  • 25 were not registered to vote
• 205 (58.2 percent) live outside the city 
• • 136 are registered to vote in Lamar County
    • 28 on rural roads throughout the county
    • 28 in Powderly
    • 23 in Reno
    • 16 in Sumner
    • 13 in Blossom
    • 8 in Roxton
    • 7 in Arthur City
    • 6 in Pattonville
    • 5 in Brookston
    • 1 in Detroit
    • 1 in Honey Grove

Of the 69 city employees who do not live in the city and who are not registered to vote in either the City of Paris or Lamar County, 22 live in the county and 47 live outside the county. The 22 who live in the county, but aren’t registered to vote, include:

• 6 in Reno
• 4 in Blossom
• 4 in Powderly
• 3 in Sumner
• 2 in Pattonville
• 1 in Arthur City
• 1 in Brookston
• 1 in Roxton

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send questions or comments about this article to

extra@eparistexas.com

Higgins Top Readers Win Bicycles

Higgins Elementary recognized the top Accelerated Reader (AR) students on their campus at North Lamar ISD.  These young readers checked out library books, read them and took a comprehensive test to accumulate AR points.   A drawing was held and Case Collum and Hannah Semanek won bicycles donated by Pierson & Fendley Insurance. 

Top AR students from each first grade class at Higgins were eligible for the drawing.   Readers pictured are, sitting left to right, Hannah Semanek, Case Collum, Kellie Welch, Brock Davis, Blake Piper, Alayna Covey and Morgan Edwards.  Standing is Library Assistant Casidy Figueroa, Librarian Lynnette Johnson, Keaston Lawrence, Gracie Cole, Emma Layton, Bailey Scott, Faith Millsap, Chelsie Upchurch, Zain Figueroa, Walker McElvany, Sloane Hill, Alexis Ellis, Higgins Principal Claudia Pursifull and Pierson & Fendley agents Clifton Fendley and Zach Saffle.

Ivan Smith Memorial Day Sale