Not Investment Advice

[elindholm]

The least I did was provide a YouTube video.

Serious question: Are you aware that anyone can create and upload a YouTube video?

 

[dscher]

Serious question: Are you aware that anyone can create and upload a YouTube video?

Not really a serious question IMO. Nonetheless, I'll bite.

Sure. I did know that! Now, what does that have to do with the content I posted? Is it to imply that person is not able to form his own opinion and analysis about a subject because he's not a "somebody" and it might differ from a mainstream narrative? I think I know the answer. But, fire away if you please.

 

[Devilmaycare]

Looks like you're going to be good on your CDs for a bit @Russ Smith. Main take aways from FOMC. I'm pretty sure we're going to see at least 25 BP in July now too from JPow's press conference.

- No rate hike increase this month
- Rate cuts are unlikely in 2023
- FED goal remains 2% inflation
- FED signals possible rate increases this year
- Two rate hikes with .25bps expected by FED this year

 

[dscher]

Looks like you're going to be good on your CDs for a bit @Russ Smith. Main take aways from FOMC. I'm pretty sure we're going to see at least 25 BP in July now too from JPow's press conference.

- No rate hike increase this month
- Rate cuts are unlikely in 2023
- FED goal remains 2% inflation
- FED signals possible rate increases this year
- Two rate hikes with .25bps expected by FED this year

Inverted yield curve is still the elephant right now IMO. Looks like we could be getting a resteeepening here soon. Lower short term rates and higher long end. This dynamic could easily change the Feds mind by next month. But that would likely be at the expense of lower asset prices. But, that's a lot of unknowns ATM. It will be an interesting summer in the markets. That much I know.

 

[Russ Smith]

Looks like you're going to be good on your CDs for a bit @Russ Smith. Main take aways from FOMC. I'm pretty sure we're going to see at least 25 BP in July now too from JPow's press conference.

- No rate hike increase this month
- Rate cuts are unlikely in 2023
- FED goal remains 2% inflation
- FED signals possible rate increases this year
- Two rate hikes with .25bps expected by FED this year

A crazy world. My "introduction" into saving money was in HS with huge inflation under Ford and then Carter. I used CD's to save enough money to buy my first car, used VW rabbit.

I eventually sold that to my friend and bought a Mustang. I couldn't get a loan, no credit history so I did the stupid thing while changing jobs and cashed in my first 401K and took the penalty and bought the car in cash. 22 so 150 a month in insurance until I turned 25. Made literally every mistake known to mankind on that and didn't even get to build credit because I paid cash for the car. I thought I was so smart the guys at the dealership were trying to tell me dude we can finance you(I had applied at my credit union and been rejected) and I thought no I'm not falling for that.

But I learned my lesson, and have been saving ever since. and now although CD's aren't close to that now, as I'm moving into an eventual retirement I'm using CD's as a safe vehicle to save again

 

[Yuma]

A crazy world. My "introduction" into saving money was in HS with huge inflation under Ford and then Carter. I used CD's to save enough money to buy my first car, used VW rabbit.

I eventually sold that to my friend and bought a Mustang. I couldn't get a loan, no credit history so I did the stupid thing while changing jobs and cashed in my first 401K and took the penalty and bought the car in cash. 22 so 150 a month in insurance until I turned 25. Made literally every mistake known to mankind on that and didn't even get to build credit because I paid cash for the car. I thought I was so smart the guys at the dealership were trying to tell me dude we can finance you(I had applied at my credit union and been rejected) and I thought no I'm not falling for that.

But I learned my lesson, and have been saving ever since. and now although CD's aren't close to that now, as I'm moving into an eventual retirement I'm using CD's as a safe vehicle to save again

Yeah, I was a kid, and I golfed with seniors during that time. I remember they were always talking about how much money they were making. My dad was always griping about how much money he was losing. That was my first introduction to economics. High rates are bad for borrowing, which my dad had to do to support a family, by having car loans, bought a house, etc. If you are saving, the high rates are great! So all the retired folks I was golfing with loved those high rates!

 

[jf-08]

The S&P earnings yield, corporate bonds, and t-bills are all offering the same yield of 5.3% which means a medium risk, low risk, and no risk asset is offering the exact same yield. Whoa.

You must be registered for see images attach

 

[dscher]

The S&P earnings yield, corporate bonds, and t-bills are all offering the same yield of 5.3% which means a medium risk, low risk, and no risk asset is offering the exact same yield. Whoa.

You must be registered for see images attach

The longer we stay massively inverted on the yield curve the more damage is being done...

Things CNBC will never talk about.

That's why you know it's a concern.

 

[Yuma]

IDK, I saw these type of things all four years of Trump's presidency and the bottom didn't fall out. Now two years into Biden, and we were supposed to collapse from his over spending. These were bench marks I was taught in business school would mean instant death to our economy. Now we have lived through these bench marks being beaten to hell and back, and we are still here. We should have had Great Depressions 10X over by now. Not saying I don't believe the economy is bad, just that the bench marks aren't what we thought they were. I think our old way of looking at nation's economies has to be revamped. Right now consumer spending is propping up the government, in my opinion.

People keep right on spending. I go out and the grocery stores in my area are humming. Home Depot is super busy in Laveen. Fast food places in Laveen have the worst customer service ratings in all of Phoenix, and the cars are backed up waiting to get food. We definitely don't act like there is a fiscal crisis in the USA right now.

 

[Russ Smith]

Questions on brokered CD's. I understand they're callable so even though the term says 12 months you aren't guaranteed that. I assume it's "best" to buy a CD that has a later callable date? For example right now I see this on Vanguard, 5.55% for JP Morgan Chase for 12 months but says callable 9/23, and then 5.5% also by JP Morgan, but it's callable 12/23.

So is it safe to assume the 5.5 one is "better" because the callable date is further out?

I have my Vanguard set up now so I can buy other things I was thinking brokered CD or money market. Turns out money market funds are not FDIC insured, money marke ACCOUNTS are but not funds, so I am looking at brokered CD's now. I had a brokered CD in my Fidelity but I wasn't even concerned with callable then.

There's a 6 month with Goldman Sachs paying 5% no callable date because it's only 6 months. ALl the higher rates in 6 months are banks I've never heard of. 9 months Again JP Morgan has a good one 5.4% but it's callable in September so not guaranteed. I assume if rates start to come down that's when they'd call them?

 

[elindholm]

Questions on brokered CD's. I understand they're callable so even though the term says 12 months you aren't guaranteed that. I assume it's "best" to buy a CD that has a later callable date? For example right now I see this on Vanguard, 5.55% for JP Morgan Chase for 12 months but says callable 9/23, and then 5.5% also by JP Morgan, but it's callable 12/23.

So is it safe to assume the 5.5 one is "better" because the callable date is further out?

Since CDs are supposed to be conservative investments, I'd focus on the guaranteed dollar figure of appreciation. If you get one today with a nominal 5.55 APR and it's called on 9/23, you're walking away with maybe 1%. At the same time, you're assuming the risk of having your money trapped if interest rates rise. So it's a win-win for the bank.

Unless the yields are really tempting, I don't see any advantage to callable CDs over a money market. FDRXX has a trailing 7-day APR of 4.77%, giving you full flexibility for a fairly trivial reduction in interest rate.

 

[Russ Smith]

Since CDs are supposed to be conservative investments, I'd focus on the guaranteed dollar figure of appreciation. If you get one today with a nominal 5.55 APR and it's called on 9/23, you're walking away with maybe 1%. At the same time, you're assuming the risk of having your money trapped if interest rates rise. So it's a win-win for the bank.

Unless the yields are really tempting, I don't see any advantage to callable CDs over a money market. FDRXX has a trailing 7-day APR of 4.77%, giving you full flexibility for a fairly trivial reduction in interest rate.

Long story short I moved my money with Vanguard into 2 new accounts and then they informed me I STILL can't buy CD's or money markets without making more changes. I was pretty frustrated since that was the whole point so the entire amount of both is still in a fund for people retiring in 2030.

But yeah I think you're right.

I'm mostly in stocks but with the high interest rates I'm taking advantage. My Capital One high yield savings is up to 4.15 now and they have a 12 an 18 month CD at 4.75 but I'm not in it yet. I have a CD expiring in Sept so I'll probably put that into an 18 month CD if I don't need the money.

I'm starting a new job on the 17th so I think I can safely keep putting most of my money into CD's and just keep an emergency fund in the high yield savings.

 

[Folster]

Questions on brokered CD's. I understand they're callable so even though the term says 12 months you aren't guaranteed that. I assume it's "best" to buy a CD that has a later callable date? For example right now I see this on Vanguard, 5.55% for JP Morgan Chase for 12 months but says callable 9/23, and then 5.5% also by JP Morgan, but it's callable 12/23.

So is it safe to assume the 5.5 one is "better" because the callable date is further out?

I have my Vanguard set up now so I can buy other things I was thinking brokered CD or money market. Turns out money market funds are not FDIC insured, money marke ACCOUNTS are but not funds, so I am looking at brokered CD's now. I had a brokered CD in my Fidelity but I wasn't even concerned with callable then.

There's a 6 month with Goldman Sachs paying 5% no callable date because it's only 6 months. ALl the higher rates in 6 months are banks I've never heard of. 9 months Again JP Morgan has a good one 5.4% but it's callable in September so not guaranteed. I assume if rates start to come down that's when they'd call them?

Not all brokered CDs are callable. I haven't looked at our inventory recently, but very few were callable last I looked. The callable rates are higher because of the added risk that you are assuming. The only reason they would be called is if rates go down which would allow the bank to refinance (pay you off and then borrow at a lower rate), and you'd be stuck with cash and lower CD rates to chose from.

Don't worry about the name of the bank. They are all operating within the US banking system and are FDIC insured up to 250K. I probably wouldn't mess with callable, but I would ladder to reduce interest rate and liquidity risk.

 

[Folster]

Yeah. I see that 12 month JPM CD callable after 6 months at 5.50%. I'm looking at 6-12 months and only 8 of 43 are callable. Best rate on non-callable is a 9 month from USAA at 5.35%. Best 12 month is 5.30%. I'm sure the CD inventory is the same across brokers.

 

[elindholm]

SCHW taking off, way to go Folster!

 

[Folster]

SCHW taking off, way to go Folster!

Welcome news after T got crushed yesterday on the WSJ report of a potentially serious lead contamination liability.

 

[elindholm]

Welcome news after T got crushed yesterday on the WSJ report of a potentially serious lead contamination liability.

Yeah T has been an absolute disaster. Glad I got out when I did, not that VZ, which I switched into, has been a whole lot better.

My recent success story is EXPE, bought two months ago and up 25%. It ties in with my macro guess that people are going to gradually start wanting "experiences" more than they want "things."

 

[Yuma]

I just watched a show about investing in banks, and I remember seeing some in here talking about that. So what I learned:

The key metric in trading banks is (Stock) Price to tangible book value. They said the everyday Institutional traders say but at or just below 1.0 and trade when the stock approaches or exceeds 2.0.

Just thought I would throw that out there for general trading knowledge.

 

[Yuma]

Geez, my 401K sucks! Last couple companies the offerings for investments are caca. So with the market so hot, I wanted to move some funds out of the market, maybe buy bonds, REITs, diversify out of my stock exposure. So they have no bonds, or bond index funds. REITs, good luck with that. They have a bunch of target date funds, that guess what, mostly invested in the market! So I looked at a couple, and they mirror the S&P 500 fund I am in now almost exactly, except not as much yield. Also, they have higher expense ratios. Great! LOL! I am still stuck in my S&P500.

 

[dscher]

Geez, my 401K sucks! Last couple companies the offerings for investments are caca. So with the market so hot, I wanted to move some funds out of the market, maybe buy bonds, REITs, diversify out of my stock exposure. So they have no bonds, or bond index funds. REITs, good luck with that. They have a bunch of target date funds, that guess what, mostly invested in the market! So I looked at a couple, and they mirror the S&P 500 fund I am in now almost exactly, except not as much yield. Also, they have higher expense ratios. Great! LOL! I am still stuck in my S&P500.

They should have an income target date fund on there that is set for retirement income. Like a 2025/2030 fund. They will naturally have a more balanced bond/stock portfolio. 60/40 ish at the very least.

If not, that does suck and is ridiculous.

 

[Yuma]

They should have an income target date fund on there that is set for retirement income. Like a 2025/2030 fund. They will naturally have a more balanced bond/stock portfolio. 60/40 ish at the very least.

If not, that does suck and is ridiculous.

I looked at the chart for the targeted one, and they let you compare to S&P 500 chart, and the S&P 500 has higher highs, and they both bottom out to the exact same lows! There's no smoothing of results by the targeted one. I am thinking if they both hit the same lows, why change? Plus the targeted is 6X the expense.

 

[dscher]

I looked at the chart for the targeted one, and they let you compare to S&P 500 chart, and the S&P 500 has higher highs, and they both bottom out to the exact same lows! There's no smoothing of results by the targeted one. I am thinking if they both hit the same lows, why change? Plus the targeted is 6X the expense.

If the point is to diversify and take some risk off, then it's going to protect you, relatively, in the case of any significant downturn. You won't mind that expense ratio if you lose only half of what the SPX does during that timeframe. Treasuries especially will be a useful addition when the fed cuts IMO. (Which I believe is close)

Good luck.

 

[Yuma]

If the point is to diversify and take some risk off, then it's going to protect you, relatively, in the case of any significant downturn. You won't mind that expense ratio if you lose only half of what the SPX does during that timeframe. Treasuries especially will be a useful addition when the fed cuts IMO. (Which I believe is close)

Good luck.

I know, but when you put the S&P chart over the one with treasuries in it, somehow they mirror the S&P 500 chart, ESPECIALLY in the downturns! IDK, how they managed that! There's no apparent diversity.

 

[Devilmaycare]

Geez, my 401K sucks! Last couple companies the offerings for investments are caca. So with the market so hot, I wanted to move some funds out of the market, maybe buy bonds, REITs, diversify out of my stock exposure. So they have no bonds, or bond index funds. REITs, good luck with that. They have a bunch of target date funds, that guess what, mostly invested in the market! So I looked at a couple, and they mirror the S&P 500 fund I am in now almost exactly, except not as much yield. Also, they have higher expense ratios. Great! LOL! I am still stuck in my S&P500.

Be really careful with REITs right now. That's an asset class that really scares me with what's going on in commercial real estate.

 

[Yuma]

Be really careful with REITs right now. That's an asset class that really scares me with what's going on in commercial real estate.

I was looking into them, there's two main types, actual buildings and land based ones, and then mortgage ones that do mostly mortgages backed securities. So there's scariness in both types. The mortgage ones running double digits right now. There's one I looked at with Vanguard that does a lot of houses versus commercial. I am thinking long term I want ETFs that are stocks, bonds, and real estate. Thinking I will buy when any of these sectors are undervalued, to kinda diversify and rebalance over time. I opened a Roth IRA, and when I start working again, I may just us that to invest going forward. Gotta get some tax free appreciation of my investing funds!