Save more, invest better... but how?

Tips on high-yield CDs and undervalued stocks. And how to find that ETF you are looking for?

Welcome to the second edition of the Gist by AskFinny, where we share tips on saving money, budgeting, investing, and even stock picking.  In our first post, we shared tips on high-yield savings accounts, super-simple investment portfolios and investing in country ETFs with potentially a meaningful upside.  If you missed it, read it here.  

The Gist comes to your Inbox once a week.  If any of this is useful to you, please invite your family and friends to join the community here. Keep in mind, the following content is not financial advice and does not contain any security or product purchase recommendations. 

You can also ask us any finance or investment question privately by visiting  AskFinny.com.  We will share the most insightful questions and answers with our Gist audience.  

In this edition, you’ll find out about: 

  1. 5-yr CDs with the highest yield

  2. Bargain stocks, based on several filters we applied 

  3. How to find that ETF or mutual fund you are looking--in a very simple way? 

So let’s start with the summary of our findings.

Summary

1. Here is the chart of the financial institutions with the highest 5-year CD rates.

2.  We screened stocks based on a variety of valuation yardsticks--here are the stocks that appear undervalued:  

You can also always ask Finny for “bargain stocks” by visiting AskFinny.com and typing “bargain stocks”.  We update the selection weekly. Keep in mind, this is not a recommendation to buy any of these stocks--it’s just the output of our unbiased analysis.    

3.  Looking for an ETF or fund addressing a specific market opportunity? Start with AskFinny--type the market you’re interested in, such as “South Korea fund”.  Here is an example:   

Now let’s expand on this and share with you our detailed thinking. 

Deep Dive 

1. Interested in CDs with the highest yield? We scoured the web and discovered a few that you should take a look at.  By the way, this is the freshest info you’ll find--much better than what you’d get using search engines.  

Savers looking for the best CD rates will find out that most of the time relatively small or not well-known financial institutions offer the highest interest rates.  That should not be a problem though, as long as these banks are members of the Federal Deposit Insurance Corp and credit unions are members of the National Credit Union Administration.  In those cases, you can rest easy knowing your deposit will be returned to you if something happens to the bank or credit union.

Here are the institutions offering the highest 5-year CD rates, along with minimum deposits and early withdrawal penalties:  

  1. The Federal Savings Bank

    • APY: 3.30%

    • Minimum investment: $10,000

    • Penalty: 365 days of interest

    • More info: Click here

  2. Citizens State Bank

    • APY: 3.20%

    • Minimum investment: $1,000

    • Penalty: Between 3-9 months of interest

    • More info: Click here

  3. Hiway Federal Credit Union

    • APY: 3.20%

    • Minimum investment: $25,000

    • Penalty: 365 days of interest

    • More info: Click here

  4. State Department Federal Credit Union

    • APY: 3.09%

    • Minimum investment: $500

    • Penalty: 360 days of interest (if held 360+ days)

    • More info: Click here

Here are a few more insights about these banks and credit unions: 

  • Federal Savings Bank is privately held veteran-owned bank with a primary focus of encouraging home ownership, though it offers CDs nationwide. 

  • Citizens State Bank recently launched its interactive virtual banking platform, offering its financial products nationwide.

  • Hiway Federal Credit Union serves employees of the Minnesota Department of Transportation.  It has 75,000 members. 

2. The market is at the top of the range, but are there still good stocks to invest in?  

You might have heard various pundits talk about undervalued stocks; most recently, a statement from JP Morgan Chase talking head, Marko Kolanovic, about potential for stocks with low P/E and P/B ratios.  

Here are some stocks that look cheap on a variety of valuation yardsticks: P/E ratio, price/sales, price/book, PEG Ratio, and free cash flow as a percentage of market cap. If you’re not familiar with those terms, we’d like you to know that those metrics are broadly used to compare stocks to one another--and understand which stocks are valued below or above the rest.  Here are some picks:   

  • Toll Brothers (TOL)--arranges finance for luxury homes in luxury residential communities in the United States.  Besides the ratios, we think that the aging baby boomer population could drive demand for Toll Brothers’ products for empty nesters.  Also, continued job growth should drive demand for new homes.

  • Prudential (PRU) is an insurance mega-house.  Besides the valuation rations, we believe that rising interest rates create a better operating environment for the company.

  • Adient (ADNT) is the dominant seating firm in major automotive markets, and we do not see that changing.

This stock screen is a good starting point for your further research, but there is probably a good reason why these stocks are ‘cheap’.  Be sure to do dig deeper before making an investment decision--and don’t treat this as financial advice or a recommendation to purchase the stocks. 

3.  In the previous edition of the The Gist, we covered country-specific investments for alpha seekers.  Some of you have asked us how you should go about selecting those country-specific investments--and where to find those specialty ETFs and mutual funds. 

We built a simple tool on AskFinny to help you with this.  All you have to do is type what ETF or fund you’re interested in, e.g., “South Korea fund” or “South Korea ETF”.  The select the security you’d like to explore further.  

Or try this:

If you’re interested in another market opportunity, such as gold, oil or real estate, just ask Finny what you’re interested in, e.g., “gold ETN”.  

That’s it for this edition.  What would you like to hear about in our next Gist?  Ask us a question here.

The AskFinny Team