Now could be a good time to recoup some bond-holding losses
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The above figures apply only to one bond. If your marginal tax bracket is higher, the benefits of switching to take the loss for 1981 would be greater. If gains and losses do not benefit you, I suggest holding until prices recover. Or, if you are investing new money, deep discount bonds could be a good buy now. Brokers as bankersSkip to next paragraph
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I understand that at least one major brokerage house operates a cash account in connection with VISA much like a bank. A client may write checks on the account that may include cash in a money market fund plus a portfolio of securities. Checks can be written on the account and charges made through VISA. A quote in a financial paper noted that if the money fund ran low for the client , the loan account takes over, using the customer's securities as collateral. All this is reported only on a computer printout statement. Would the brokers sell securities if the money fund ran low? Does the ''running low'' mean only the client's account or the whole money fund? - G. R.
The cash and securities account you refer to functions much like a bank. You can write checks, trade securities, and collect dividends and interest in a money market fund that today would likely be earning about 15 percent. Generally , these accounts require a minimum of $20,000 in cash and/or securities. Writing checks withdraws funds from the money market fund. If the account runs low, a loan could be automatic as long as sufficient collateral exists. How far down that account could be drawn is a question you should ask the broker. The cash and securities account is not designed primarily for loans. Its main function is to facilitate securities trading.
Investments and deposits are assets
If required to list one's investments in a legal matter, should certificates of deposit be included in the list? Bank personnel I have asked classify CDs as deposits rather than investments. What do you say? - K. R.
Generally, a listing of investments to qualify for a loan or some other legal purpose involves putting together a balance sheet. All assets and liablilities will be listed at current values to gain a bottom line noted as ''net worth.'' All assets, even cash, will be included, along with deposits, securities, etc. Depending on the legal intention, investments and deposits represent assets, and the difference in terminology makes little difference. On the other hand, deposits in a bank or savings institution are insured up to $100,000 if the institution is a member of FDIC, FSLIC, or other insuring organization. But the currently popular repos are investments backed by government securities. Repo accounts are not insured because they are not deposits. Thus, depending on your purpose, terminology could be important.
Readers are invited to send questions to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass., 02115. Only a selection of such questions covering topics of general interest can be answered here, and no question can be individually acknowledged. References to specific stocks, funds, or other investments in this column are intended for the general information of readers and not as an endorsement or recommendation by The Christian Science Monitor.m