Mutual Funds






America's Fastest Growing Independent Financial Advisory Network
A Nationwide Network of 100% Independent & 100% Objective Fee-Only Financial Advisers

Picture of The-Adviser The-Adviser.com The place to come for answers™
Should I buy a CMO?
By The-Adviser.com -   

Money Management
Portfolio Reviews
401(k) Rollovers

Financial Plans
Estate Plans
College Savings
Ask The-Adviser
Clients Only

Available Services
"Interview Us"
Fee Information

Clients Only

The Press


Home Page

Related Links

Stock Quotes

New York - A collateralized mortgage obligation (CMO) is a derivative security that is backed with various underlying mortgage pools for collateral. Although the mortgage pools may be from Fannie Maes or Ginnie Maes, CMO's are simply much more aggressive and riskier investments.

A CMO is a tranche or a piece of mortgage pools that is sliced into various classes such as principal only classes, residuals, or classes based on ranges of interest rates. They are normally sold to financial institutions who can analyze these investment pools and who need to match up certain investments with their liabilities. Whatever CMO tranches are not sold to institutions, they are sold to individual investors.

Many brokers attempt to sell you these securities based on yield and the fact that yields are higher than various regular or plain-vanilla treasuries. The reason is the risk. Quick swings in interest rates - either up or down - can have a significant and often unknown effect on a CMO security. Maturities of the CMO's can not be predicted without any accuracy.

We believe that CMO's should not be owned by individual investors. If you are looking for a fixed income investment, purchase a no-load Treasury bond fund with expenses less than .5% annually. If you are certain that you will hold a bond until it's maturity, you may be able to purchase a Treasury bond direct and avoid paying the .5% fee.

About Us
The Independent Adviser Corporation is a 100% Independent and 100% Objective Financial Advisory Firm that writes buy-side investment research. Our network of independent Fee-Only Financial Advisers serves individuals, families and businesses. They provide financial planning services, tax advice and offer professionally managed asset accounts. They do not underwrite corporate securities nor do they sell any proprietary products. To find out more or get a FREE consultation Ask The-Adviser.com or call 1-800-ADVISER.


In Association with Amazon.com

Our independent Fee-Only Financial Advisers develop investment strategies for individuals, families and businesses.

Got an investment question?
Ask The-Adviser.com

Open a professionally managed account:

  • Brokerage Accounts
  • Traditional IRAs
  • Roth IRAs
  • 401(k) IRA Rollovers
  • 403(b) IRA Rollovers
  • College Savings
  • Retirement Savings

Hire The-Adviser.com

Click here for our Top Ten Investment Picks

Financial Advisory Services
Money Management
Retirement Planning
Portfolio Reviews
401(k) Rollover Assistance
College Savings
Financial Plans

In Association with Amazon.com

You don't need to be rich to hire a Financial Adviser. Just Smart

The Independent Adviser Corporation is a Registered Investment Adviser that specializes in helping individuals, families and businesses develop investment and financial planning strategies.
Click here to learn more about our Fee-Only services

Do you have a question about your investments?
Ask The-Adviser.com

America's Independent-Adviser.

© Copyright. The Independent Adviser Corporation.  All rights reserved. Important Legal Information