Yeah... except just remember... common everyday email is NOT ENCRYPTED. If you want something to be really pretty private, send it by US Mail... or encrypt it.
How do you invest the Cash portion?
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Re: How do you invest the Cash portion?
- dualstow
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Re: How do you invest the Cash portion?
I have to say I miss it. There's a blue mailbox half a block away from me, and I enjoyed the process of walking there more than I do a button click. Of course, the new way is easier and I usually have fund purchases on autopilot anyway.vnatale wrote: ↑Tue Nov 05, 2019 12:26 pmDoes that whole process now seem like the Dark Ages compared to now? I also used to buy tons of stamps back and write a lot of checks. Now it's only a handful of stamps used ALL year and not that many checks written.
Vinny
Paying bills with a check and stamp on the other hand is not so much fun, so I do think of that in a Dark Agey way. (Also on autopilot now).
Encryption: well, I read about thieves who raid mailboxes with a stick and tape attached. They erase the writing on checks and steal them. So, every system has its weakness. Once in a while I use protonmail to send an email to friends, and if it's something sensitive, I lock it with a password and supply a hint. Or rather, I used to. More often than not, they'd text me and ask "What's this?" They were afraid to open it.
But, usually it's gmail to gmail, so-- only the good folks at google can read it. j/k
Re: How do you invest the Cash portion?
I am going to grab a 1 year Jumbo CD with 2.06% APR at Advancial Credit Union, which is a Texas credit union with branches in some of the Energy States: TX, LA, AK, OK. But I think anyone can open an account and buy a CD.
Re: How do you invest the Cash portion?
I swear my Discover Bank CD just rolled over at a higher rate than that...hrm, looks like it did (2.2% a few weeks ago), but they're now down to offering 2.00%.ochotona wrote: ↑Sat Nov 23, 2019 4:28 pm I am going to grab a 1 year Jumbo CD with 2.06% APR at Advancial Credit Union, which is a Texas credit union with branches in some of the Energy States: TX, LA, AK, OK. But I think anyone can open an account and buy a CD.
I'm still happy I locked in some 3.1% 5-yr CDs a short while back while I could...feel that big money rollin' in
Re: How do you invest the Cash portion?
I am alternately fascinated and perplexed by the endless hunt for yield in Cash that populates this thread and others like it.
The Fed, which exerts enormous power over short-term interest rates, has repeatedly set its target for future inflation at 2%. Therefore, if you buy a CD that yields 2.06%, your expected after-inflation gain will almost certainly be around +0.06%. That miniscule real yield will be further reduced by federal, state, and local taxes that will eat away at your net gain.
Note also if future inflation rises even slightly above your current CD rate (something which has happened historically quite often), you will experience a net real decline, but will still have to pay taxes on your nominal gain.
My conclusion? CDs are a very clever mechanism that bankers use to transfer your money to their bank.
The Fed, which exerts enormous power over short-term interest rates, has repeatedly set its target for future inflation at 2%. Therefore, if you buy a CD that yields 2.06%, your expected after-inflation gain will almost certainly be around +0.06%. That miniscule real yield will be further reduced by federal, state, and local taxes that will eat away at your net gain.
Note also if future inflation rises even slightly above your current CD rate (something which has happened historically quite often), you will experience a net real decline, but will still have to pay taxes on your nominal gain.
My conclusion? CDs are a very clever mechanism that bankers use to transfer your money to their bank.
Last edited by jhogue on Sun Nov 24, 2019 1:33 pm, edited 1 time in total.
“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!"
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!"
Re: How do you invest the Cash portion?
1 year Treasuries are 1.56%, I think 2.06% for a 1 year CD is the better choice. No one is promising us any rose gardens here, we're just trying to make the least bad choices.
Re: How do you invest the Cash portion?
A 3 month T bill sold for 1.56% on 11/21/19 at Fidelity. I think the 4 week was about the same.
With yields this low and the Treasury curve this flat, isn’t it pointless (and unnecessarily risky) to buy one year bank CDs instead of T-bills on auto-roll?
With yields this low and the Treasury curve this flat, isn’t it pointless (and unnecessarily risky) to buy one year bank CDs instead of T-bills on auto-roll?
“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!"
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!"
- dualstow
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Re: How do you invest the Cash portion?
I'm too lazy to chase yield, but I do enjoy reading the threads of those who chase it.by jhogue » Today, 3:26 pm \
I am alternately fascinated and perplexed by the endless hunt for yield in Cash that populates this thread and others like it.
Setting aside the long bonds I bought for the vp, I have a small set of notes of various maturities that pay between 1 and 2% overall.
Some began life (in my holdings) as ten year notes, others as 5-years, and so on. Putting them in order by maturity date, there will be one reaching the finish line about every year or year and a half.
I used to think what a mistake it was to buy them. Now the yield is looking pretty good. I want to draw a tacky analogy, but I'll resist.
But, I like watching what was pathetic deep cash turn into pretty good cash.
The pp has notes paying 2.6% and 2.75%, hooray. But what happens when they mature? I'll probably be buying notes at 1% or VUSXX which is going down (the yield) every week. 1.71% compounded, right now.
Re: How do you invest the Cash portion?
Agree with the lazy approach. My solution is a STT fund. You are always going to get the X yr average of the funds target.
- vnatale
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Re: How do you invest the Cash portion?
"STT" = ??
Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Re: How do you invest the Cash portion?
dualstow,dualstow wrote: ↑Sun Nov 24, 2019 2:51 pmI'm too lazy to chase yield, but I do enjoy reading the threads of those who chase it.by jhogue » Today, 3:26 pm \
I am alternately fascinated and perplexed by the endless hunt for yield in Cash that populates this thread and others like it.
Setting aside the long bonds I bought for the vp, I have a small set of notes of various maturities that pay between 1 and 2% overall.
Some began life (in my holdings) as ten year notes, others as 5-years, and so on. Putting them in order by maturity date, there will be one reaching the finish line about every year or year and a half.
I used to think what a mistake it was to buy them. Now the yield is looking pretty good. I want to draw a tacky analogy, but I'll resist.
But, I like watching what was pathetic deep cash turn into pretty good cash.
The pp has notes paying 2.6% and 2.75%, hooray. But what happens when they mature? I'll probably be buying notes at 1% or VUSXX which is going down (the yield) every week. 1.71% compounded, right now.
Looking in the rear view mirror, your ten year ladder of CDs must seem like a sure-fire-no-brainer-strategy for any amount of cash up to the $250,000 FDIC limit. Low inflation and Trump’s tax cut didn’t hurt either.
Here’s the problem as I see it:
Domestic STTs and ITTs are now stuck in a lower-bound range of 1.5 - 1.8%, and trillions in negative yielding euro and Swiss franc bonds are piling ever higher in Europe. There is no way that you can build a new ladder of of ten year CDs going forward that will bring you the after-inflation and after-tax yield your old CD ladder did. Interest rates can stay the same or they can rise, but they cannot continue to fall at the rate they did over the last decade for the next decade.
“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!"
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!"
- dualstow
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Re: How do you invest the Cash portion?
Who knows what the future holds, jhogue.
It's very tempting to just have a large stock-heavy vp with zaftig dividends.
It's very tempting to just have a large stock-heavy vp with zaftig dividends.
Re: How do you invest the Cash portion?
SCHD yields 3.18 (SEC yield) and no foreign currency risk...
Re: How do you invest the Cash portion?
- mathjak107
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Re: How do you invest the Cash portion?
no stock fund ever should be used as a proxy for cash and interest . dividends are not interest ...
they serve two different purposes ... stocks are stocks whether they distribute a piece of your share price back to you as a dividend or not . they are never a proxy for interest and the safety of cash instruments .
they serve two different purposes ... stocks are stocks whether they distribute a piece of your share price back to you as a dividend or not . they are never a proxy for interest and the safety of cash instruments .
- dualstow
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Re: How do you invest the Cash portion?
Totally agree. Not a proxy. All the same, I have cash in the vp that will probably become dividend stocks.mathjak107 wrote: ↑Tue Nov 26, 2019 7:50 am no stock fund ever should be used as a proxy for cash and interest . dividends are not interest ...
they serve two different purposes ... stocks are stocks whether they distribute a piece of your share price back to you as a dividend or not . they are never a proxy for interest and the safety of cash instruments .
PP cash is sacrosanct with regard to both quality and proportion of the whole.
Even notes longer than 3-years don't belong in the pp cash section. They've got the quality, but they are just not cash.
Re: How do you invest the Cash portion?
I haven’t bought a T-bill with a maturity longer than one year for several years now.
Unless you have some specific liability matching in mind, which would rather buy today?
-A one year Treasury bill at 1.64%, or ,
-A three year Treasury bill at 1.57%,.
Unless you have some specific liability matching in mind, which would rather buy today?
-A one year Treasury bill at 1.64%, or ,
-A three year Treasury bill at 1.57%,.
“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!"
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!"
- dualstow
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Re: How do you invest the Cash portion?
One of each, please.
Seriously, it depends on which way you think rates are going. I do in fact buy both.
Seriously, it depends on which way you think rates are going. I do in fact buy both.
- dualstow
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Re: How do you invest the Cash portion?
Looks like Ally checking's interest rate has dipped from 0.6% to 0.5%.
Vanguard treasury mm/VUSXX/Fund 0011 is down to 1.69% compounded.
Vanguard treasury mm/VUSXX/Fund 0011 is down to 1.69% compounded.
- dualstow
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Re: How do you invest the Cash portion?
I don't have a problem with it, even though I don't buy them. I guess I would have to try it to really know.
I would ask jhogue, though.
I would ask jhogue, though.