Page 20 of 20

Re: How do you invest the Cash portion?

Posted: Tue May 12, 2020 6:48 pm
by Kriegsspiel
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.

Re: How do you invest the Cash portion?

Posted: Sun May 31, 2020 5:04 am
by Hal
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

Re: How do you invest the Cash portion?

Posted: Sun May 31, 2020 6:09 am
by mathjak107
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 .

Re: How do you invest the Cash portion?

Posted: Sun May 31, 2020 12:10 pm
by jhogue
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.