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Re: How do you invest the Cash portion?

Posted: Tue Nov 05, 2019 12:40 pm
by ochotona
vnatale wrote:
Tue Nov 05, 2019 12:26 pm

Does 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
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.

Re: How do you invest the Cash portion?

Posted: Tue Nov 05, 2019 1:37 pm
by pugchief
ochotona wrote:
Tue Nov 05, 2019 12:40 pm
vnatale wrote:
Tue Nov 05, 2019 12:26 pm

Does 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
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.
Gmail is encrypted if sending to another Gmail account, but you are correct, not outside the system.

Re: How do you invest the Cash portion?

Posted: Tue Nov 05, 2019 2:08 pm
by dualstow
vnatale wrote:
Tue Nov 05, 2019 12:26 pm
dualstow wrote:
Tue Nov 05, 2019 7:55 am
sophie wrote:
Tue Oct 29, 2019 9:09 am
...
I learned something new about Vanguard today.
...

The fund numbers were more useful in the old days when I used to buy shares with a paper check in the mail. You had to write the fund number on the form and on the check.
Does 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
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.

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. O0 j/k

Re: How do you invest the Cash portion?

Posted: Sat Nov 23, 2019 4:28 pm
by ochotona
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?

Posted: Sat Nov 23, 2019 6:34 pm
by drumminj
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 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%.

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?

Posted: Sun Nov 24, 2019 1:26 pm
by jhogue
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.

Re: How do you invest the Cash portion?

Posted: Sun Nov 24, 2019 1:29 pm
by ochotona
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?

Posted: Sun Nov 24, 2019 1:54 pm
by jhogue
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?

Re: How do you invest the Cash portion?

Posted: Sun Nov 24, 2019 2:51 pm
by dualstow
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.
I'm too lazy to chase yield, but I do enjoy reading the threads of those who chase 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?

Posted: Sun Nov 24, 2019 6:52 pm
by pugchief
I'd take 1.71% liquid in V Prime over 2.06% locked up for a year any day.

Re: How do you invest the Cash portion?

Posted: Sun Nov 24, 2019 8:25 pm
by Kbg
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.

Re: How do you invest the Cash portion?

Posted: Sun Nov 24, 2019 9:32 pm
by vnatale
Kbg wrote:
Sun Nov 24, 2019 8:25 pm
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.
"STT" = ??

Vinny