How do you invest the Cash portion?

Discussion of the Cash portion of the Permanent Portfolio

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Kriegsspiel
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Re: How do you invest the Cash portion?

Post by Kriegsspiel » Tue May 12, 2020 6:48 pm

sophie wrote:
Tue May 12, 2020 7:51 am
WSJ had a piece a few days ago about how the mortgage market is about to run into serious problems. Watch out for municipal bonds, mortgage backed securities, repurchase agreements, junk bonds etc. Which is what Ally is probably using to give you that interest rate.

T bills and Treasury money markets for me, at least until all this settles out. We could see another 2008 frozen-credit event - not saying it will happen just that it might.
I've been reading similar stuff.

But I can see why ocho is so blasé about it. Collect your higher interest rate, then if the bank goes under, you'll get your money anyways through the FDIC. It's almost like you only win if you DO go with the highest interest rate savings accounts. Unless FDIC fails, like because tons of people are unemployed because of a government lockdown, and they're drawing down their bank accounts... but I really don't know enough about it to do anything but speculate.
I hated all the things I had toiled for under the sun, because I must leave them to the one who comes after me. Who knows whether that person will be wise or foolish? Yet they will have control over all the fruit of my toil into which I have poured my effort and skill under the sun. . . Nothing is better for a man than to eat and drink and enjoy his work.
- Ecclesiastes
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Hal
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Re: How do you invest the Cash portion?

Post by Hal » Sun May 31, 2020 5:04 am

What are your thoughts on putting cash into senior floating rate bonds rather than unsecured bank deposits?
Eg: https://www.betashares.com.au/fund/aust ... e-bond-etf

Unfortunately there are no Australian Treasury note ETF's and while there is an FDIC equivalent, it is totally unfunded (ex-post). It is also at the discretion of the Minister if the insurance is to be activated.

All thoughts welcome.

ps: Some history https://www.theage.com.au/national/vict ... 5232x.html
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mathjak107
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Re: How do you invest the Cash portion?

Post by mathjak107 » Sun May 31, 2020 6:09 am

Kriegsspiel wrote:
Tue May 12, 2020 6:48 pm
sophie wrote:
Tue May 12, 2020 7:51 am
WSJ had a piece a few days ago about how the mortgage market is about to run into serious problems. Watch out for municipal bonds, mortgage backed securities, repurchase agreements, junk bonds etc. Which is what Ally is probably using to give you that interest rate.

T bills and Treasury money markets for me, at least until all this settles out. We could see another 2008 frozen-credit event - not saying it will happen just that it might.
I've been reading similar stuff.

But I can see why ocho is so blasé about it. Collect your higher interest rate, then if the bank goes under, you'll get your money anyways through the FDIC. It's almost like you only win if you DO go with the highest interest rate savings accounts. Unless FDIC fails, like because tons of people are unemployed because of a government lockdown, and they're drawing down their bank accounts... but I really don't know enough about it to do anything but speculate.
it should be money that you can wait for . in the even of failure you may have to wait to get paid .. it took more than 2 months to get our money out of a money market when it broke the buck and was locked. we did lose about 2.50% in that event .
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jhogue
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Re: How do you invest the Cash portion?

Post by jhogue » Sun May 31, 2020 12:10 pm

Right now, cash is starting to remind of all the complaints about gold.
But-- just like gold-- when you really need it, you want access to it right now and you want it in the safest form you can get.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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jalanlong
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Re: How do you invest the Cash portion?

Post by jalanlong » Sun Jul 05, 2020 9:21 pm

https://www.gsam.com/content/gsam/us/en ... r-etf.html

Right now I use this ETF for all of the cash in my PP. Anyone think that is a bad idea?
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mathjak107
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Re: How do you invest the Cash portion?

Post by mathjak107 » Mon Jul 06, 2020 2:54 am

if you think rates will rise t-bills can be best . but if you think rates will fall , a t-bill etf like shv or very short term fund like shy etf is better , since they rise as rates fall more . why not split the cash portion .
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