Gyroscopic Investing

I have a hypothetical question: If a bank offered you a 20 year FDIC insured cd but you had to move all of your PP money into it for those 20 years, at what cd rate would you think about doing that? 5%? 10%? Or would you not do it under any circumstances? I guess your answer sort of depends upon your view of inflation over the next 20 years. Just an interesting question I pondered.

You asked that previously I remember.

Us 20 year bond at 2.2%

Japan 20 year at .5%

German 20 year at 0

5% seems like a steal.

Scary to think about what that means for future growth.

Now tell us where it can be obtained.

I think the HBPP inflation adjusted returns are supposed to be around 4%.

Expect Heineken (HEIA) to drop a bit, from PP I do not expect anything... Just not to lose too much for too long ..

This wasn't a hypothetical question for my parents. Bank CD's were paying 18% when they retired and they invested their whole nest egg in them. They continued rolling them over as their only investment vehicle until they died - almost penniless BTW due to the declining rates hitting near zero at the end.

I don't remember what the terms were but I'm pretty sure no bank was committing to anything near 20 years. LTT's, on the other hand, were being offered at 14% which would have probably been a much better choice for them in hindsight.

If rates ever went that high again I doubt that I would keep anything more than the standard PP or GB allocation but it would be hard to sell LTTs when they reached 20 years to maturity.

jalanlong wrote: ↑Mon Mar 08, 2021 2:48 pm ... had to move all of your PP money into it for those 20 years, at what cd rate would you think about doing that? 5%? 10%?
...

That's very different from the title! I would take a CD Rate of 7% in a heartbeat, but I don't know that the pp will get me 5%. I think the average will be good over time.

Almost one year ago, the pp hit an intraday low of about -15% for me.

And it ended the year up 20%.

While I would love 5% on the cash portion like old days, I still believe the pp will do fine, but I do not know what fine is....

I'd take 8% and buy new cars and new women every year.

EdwardjK wrote: ↑Tue Mar 09, 2021 8:47 pm ... and buy ... new women every year.

Are you buying them on dips/discount or some other strategy ?

Where I live they are in decades long bullish trend (due to emancipation, feminism, etc.) so too expensive already ...

Vil wrote: ↑Wed Mar 10, 2021 11:16 am

EdwardjK wrote: ↑Tue Mar 09, 2021 8:47 pm ... and buy ... new women every year.

Are you buying them on dips/discount or some other strategy ?

Where I live they are in decades long bullish trend (due to emancipation, feminism, etc.) so too expensive already ...

I think Edward is dedicated to diversification.

My guess is 5% (not real) for the next decade.
Slightly positive real.

If anyone looks at 1 year return numbers, seems we are really close to where the bottom occurred one year ago. Look a those returns if you plunged into stocks or silver last March!



And the shelves at Target: