Why Certificates of Deposits are a great buy right now

On Monday, the two year Treasury note yielded more than the five year Treasury note. This hasn't happened since 1989, and prior to that, in 1981 - both times of recession.

What it Means: 

Usually, an inverted curve means that investors feel the future economy will grow less than the current economy - therefore, they are buying more long term notes to lock in a higher interest rate, before it falls further. However, with interest rates on 10-year notes at a 4% low, it is not likely that investors are scrambling to lock in that rate. What is actually happening, is that countries like China and Japan are buying those 10-year notes, raising prices of the bonds, which lower interest rates. (If you don't understand how that works, read the World Money Watch Special Report on Treasury Bonds)

Action Steps: 

If you need some bonds in your portfolio, or you need to park some cash, just buy some 1-, 2-, or 3-year CD's.The rates on these products are just as good as longer term Treasuries, and safer.