Emily Pandise has covered business, tech and media for NBC News since 2017. In her early 20s, she realized she had no idea how to manage her money, so she set out to change her financial habits and learned a lot along the way. Now, she wants to help others do the same with this column, “Ask a Finance Whiz.” You can find her on Twitter and Instagram at @emilypandise.

Have a question for Emily? Email us at [email protected]

Hi Emily,

Here’s a big Q I have — how am I supposed to maximize my savings these days? Interest rates are low, market is volatile, we’re in an economic recession, pending election makes any investment risky, the list goes on. I hate to have my savings sitting in a traditional savings account without any growth, but it feels like now is not the time to move money.

Would love to know what the experts recommend for someone trying to plan for some shorter term (5 year) goals.

Thanks in advance!!!!

Aileen

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Aileen,

I totally understand your concerns when it comes to moving money around, especially right now. One important thing you’re already thinking about is your time horizon — aka, when you need that money. For a short-term goal, you’ll want to keep it low risk. Fortunately, there are easy solutions here: a high-yield savings account, a CD or both.

High-yield savings accounts, or HYSAs, will give you a much higher interest rate than a traditional savings account. The latter averages around .05%, whereas HYSA can go much higher, sometimes up to 2%. Right now, that interest rate may be a little lower than usual because of the Fed’s recent rate cuts, but it will come back up in good time. And .6% is still a step up from

The S&P 500 (Index: SPX) closed the trading week ending Friday, 9 October 2020 at 3,477.13. That falls within three percent of its 3 September 2020 all-time record high close of 3,580.84.

The index rose, fell, and rose again with the prospects for another round of fiscal coronavirus stimulus coming from the U.S. government during the week. That action puts the level of the S&P 500 in the upper half of the latest redzone forecast range of the alternative futures chart – the latest update to which shows the projections of the dividend futures-based model through the end of 2020:

What the alternative futures chart doesn’t yet show is what could result for markets following the outcome of the U.S. elections. Here, if candidate Joe Biden wins, we would anticipate a partial repeat of 2012’s Great Dividend Raid.

That event was triggered in November 2012 after President Obama won re-election, which all but ensured an increase in federal income tax rates in 2013. Influential investors pulled ahead as much dividends as they could before the end of the year, which caused stock prices to rise sharply.

That would be the portion of the Great Dividend Raid we would reasonably expect to repeat during the fourth quarter of 2020 in the “Biden wins” scenario, because he has pledged to increase both personal and corporate income tax rates, and also the tax rates that apply upon both dividends and capital gains.

All these tax hikes would potentially devastate the market in 2021, but that would depend upon the actual tax changes that would be enacted. In 2013, President Obama’s fiscal cliff tax deal raised personal income tax rates, but lower tax rates held for dividends and capital gains, making it advantageous for influential investors to channel investment returns through them rather than

DETROIT, MI — A Muskegon firm will pay $66,000 to the state of Michigan this month for violations of state environmental law following a major failure of the company’s Detroit dock, which collapsed into Detroit River last fall.

Revere Dock LLC owner Steve Erickson of North Muskegon has signed a settlement with the Michigan Department of Environment, Great Lakes and Energy (EGLE) that outlines plans to restore and upgrade the site, which partly sank into the river on Nov. 26, 2019.

The state announced the settlement Oct. 12 and said Erickson has until summer to finish restoration work at the 5851 West Jefferson Avenue property. Upgrades include a new 600-foot steel seawall to replace the old wood and concrete dock that collapsed after a large pile of construction aggregate was placed near the shoreline.

The collapse initially sparked fears of contaminated drinking water because the site was used in the 1940s and 1950s for atomic bomb material development. Testing by the Great Lakes Water Authority and EGLE subsequently found no excessive levels of radioactivity.

EGLE and U.S. Environmental Protection Agency testing also found industrial contaminants in site soils and sediment at the site collapse, but not at excessive levels.

The site is the former location of Revere Copper and Brass Co., which operated there for more than 60 years. Erickson has owned the site since 2015 and leased it to Detroit Bulk Storage. It is located next to the Historic Fort Wayne property.

In January, the city of Detroit fined Revere Dock $10,000 for illegally storing limestone at the site without a permit.

Restoration plans follow months of back-and-forth between Revere Dock and EGLE, which called earlier work plans inadequate and directed improvements.

EGLE said Monday it has approved site plans following a June public hearing. Those plans call for

Portman RidgeImage source

Investment Thesis

Too many unknowns leave Portman Ridge Finance Corporation (PTMN) unsuitable for the risk-averse investor. Recent management changes and the anticipated merger with Garrison Capital (GARS) add a considerable amount of uncertainty for future performance. This is especially true given the new management’s lack of experience and PTMN’s disappointing historical performance.

Dividend Sustainability

Currently, PTMN pays $0.24 per share in dividends, annually. That translates to an 18% forward dividend yield. The sustainability of this dividend relies on two conditions:

  1. Affordable payout ratio
  2. Healthy portfolio

PTMN historically distributed more cash to shareholders than it earned. As a result, PTMN lowered its dividends every year since 2013 to try to match the income it brings in with the dividend it pays out to investors. At a $0.06 quarterly dividend, PTMN seems to have finally found its balance.

Source: Graph created by the author. Data is sourced from the company’s financial statements.

PTMN Portfolio

PTMN’s dividend sustainability depends on more than a payout ratio that is below 100%. A healthy portfolio is paramount to that end. PTMN manages $281 million worth of investments. Below is a portfolio breakdown by type and product mix.

Source: Investors’ presentation

PTMN has a relatively small stake in equity, which is a good thing. Equity is riskier than debt securities. Gladstone investment corporation’s (GAIN) revenue decreased by 40% in Q2, as portfolio companies suspended dividend distributions during the pandemic. During the same period, PTMN revenue increased by 6% because of limited exposure to equity and the expansion of the investment portfolio through borrowing.

CLO investments are also extremely risky. This is demonstrated by the ~50% decrease in PTMN’s revenue from these vehicles in Q2 as shown below:

Source: Company financial statements

Second lien loans constitute 40% of PTMN’s debt investments. This is a high percentage.

A Coral Springs-based attorney accused of misconduct while pursuing thousands of cases against Florida insurance companies should be found guilty and suspended from practice for two years, a referee recommended after an eight-day trial.

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The state Supreme Court has final say for how Scot Strems will ultimately be punished. The Florida Bar, which petitioned for an emergency suspension that began on June 9, argued that Strems should be disbarred.

Property insurers saw the Strems suspension and trial as vindicating their often-voiced stance that misconduct by a dozen or so law firms, which they call “bad actors,” are abusing the court system by bombarding insurers with lawsuits that drive up insurance costs for consumers.

Strems Law Firm P.A., they say, is among a dozen or so firms operating as lawsuit mills that target insurers, often without the knowledge of property owners named as plaintiffs, to generate lucrative legal fees worth many times more than the home repairs in dispute.

Strems’ firm, which employed 20 attorneys in six offices across the state, filed 8,756 suits against property insurers before his emergency suspension. Of them, nearly 5,000 were filed in Broward, Palm Beach and Miami-Dade counties.

The Oct. 8 recommendation by the referee in the proceedings against Strems, Judge Dawn Denaro of the 11th Judicial Circuit in Miami, followed a trial that lasted from Sept. 8 to 16.

Denaro found in September that the Bar had proven Strems and his firm violated 11 rules that govern attorneys’ behavior in the state. They include a rule barring attorneys from engaging in dishonesty, fraud, deceit or misrepresentation, or from knowingly filing evidence known to be false.

Strems also violated rules requiring attorneys to represent clients with reasonable diligence and promptness, Denaro found.

Between 2016 and 2018, Strems’ firm had about 700 cases “which