Good time to be in cash

[wildcat]

Greg ---

Cool avatar, I'm jealous.

[greg]

Wildcat: Thank Martha; she found it. She called me from work and said she found a picture of Alexander Haig. I said I'd rather be a mushroom cloud. Her picture leaves a nice glow, like a blonde, easy to find in the dark. We've been running around the house cracking wise about being Mr.&Mrs. Putin: "Mr. Putin, show me your secret Swiss bank account." "If you show me your oligarchs." bla, bla, bla. I'm trying to talk her into pretending we're ruling a Russia without pants next weekend. Nyet?

--Greg

[haha]

Quote:

Originally Posted by azanon I recommend stocks still.

Well ****, what are we waiting for?

[azanon]

Quote:

Well ****, what are we waiting for?

I'm entitled to an opinion haha.* Deal with it.

..........

Whether one should be in cash or not, and to what extent, should also have a lot to do with what your investment goals are (how long off) and what kind of timeframe you're looking at. For those that dont know, i'm 34, so for my retirement account, volatility is literally not a concern at all to me. As azazeal sang in that Denzel movie "Time...... is on my side!"

[yakers]

Quote:

Originally Posted by azanon "Time...... is on my side!"

Of course, ultimately, we're all dead.

[wildcat]

Quote:

Thank Martha; she found it. She called me from work and said she found a picture of Alexander Haig. I said I'd rather be a mushroom cloud. Her picture leaves a nice glow, like a blonde, easy to find in the dark

Thanks Martha . I suggested a bear for his avatar but that one has me beat.

[uncledrz]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON * If you can't trust the US gov't, who can you trust? http://wwws.publicdebt.treas.gov/AI/OFBills --Greg

I agree that the government will pay on its debt. OTOH there are plenty of areas in which I don't trust the government.

[wabmester]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON For what it's worth, below are the current rates on treasury bills at TreasuryDirect.* Current short term rates are near 4% for 4-week and 13 bills.* It take about five minutes to sign up, and it may be a good alternative to longer duration CDs.* If you can't trust the US gov't, who can you trust? http://wwws.publicdebt.treas.gov/AI/OFBills

Is it worth the extra 20 basis points you're getting over a money market account? Don't you have to manually rotate into new bills? And if you buy at a discount to par, the tax accounting has got to be a nightmare.

[Michael]

The tax accounting is easy. They send you a statement at year end telling you exactly what to report as income.

[Dry Socks]

Quote:

Originally Posted by wab Here's the interview: Bogle on KUOW

Hey wab, thanks for the link.

[dex]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON For what it's worth, below are the current rates on treasury bills at TreasuryDirect. Current short term rates are near 4% for 4-week and 13 bills. It take about five minutes to sign up, and it may be a good alternative to longer duration CDs. If you can't trust the US gov't, who can you trust? I did it - I scares me how little time it took to confirm my information. http://wwws.publicdebt.treas.gov/AI/OFBills --Greg

[greg]

Dex: Yeah, it's amazing how quickly they can go right into your checking account for their . . . um. . . research. Makes you wonder what else they have access to. So far so good for me. It looks like the Fed is going to continue raising rates at least a couple more times, so I'm sticking to shorter durations (4 and 13 weeks) for now. I may go out on the time curve as yields rise and as we get closer to retirement. I'll create a ladder stretching out 3-5 years. At least that's the plan so far. I sort of like playing peek-a-boo with the money: They take money out of your checking account when you buy and automatically put everything back there as the bills/notes mature. I end up having two sets of independent records.

Richard Russell says that T-bills are the safest thing to hold other than cash (actual paper money) or gold in an economic melt down or panic. It's the last line of defence. I wonder what sort of credit rating score the US would get in the real world, with all our debt?

--Greg

[dex]

Greg,
Rates are begining to look good. I think there is a possibility of the Fed rasing rates to 5%. That is the time I will be locking in. For income I plan on using a combinatioin of junk bonds, corp bonds and US Government bill. Treasury Direct is good because you don't pay the trading fees. E*Trade charges $40 to participate in a US Treasury auction.

I'm still planning to be RE in April of 2005 and I need to set up my income stream. The only thing I can see stopping me now is bird flu

[greg]

Dex: Someone here said that if long rates ever go to 7% there would be a big pile on. I may go way out on the curve if that happens--and it will when the US$ drops.

--Greg

[brewer12345]

Quote:

Originally Posted by dex Greg, Rates are begining to look good.* I think there is a possibility of the Fed rasing rates to 5%.* That is the time I will be locking in.* For income I plan on using a combinatioin of junk bonds, corp bonds and US Government bill.* Treasury Direct is good because you don't pay the trading fees.* E*Trade charges $40 to participate in a US Treasury auction. I'm still planning to be RE in April of 2005 and I need to set up my income stream.* The only thing I can see stopping me now is bird flu

This is a slight tangent to your post, but if you are looking at junk bonds, etc. how about exchange-traded preferreds, closed end funds trading at a discount to NAV, and high payout equities? It wouldn't be too hard to get tax-advantaged stuff that yields 7 to 9%. If you are worried about a rate spike, you could always buy a few out of the money (i.e. cheap) puts on TLT.

[retire@40]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON Dex:* Someone here said that if long rates ever go to 7% there would be a big pile on.* I may go way out on the curve if that happens--and it will when the US$ drops.

I like the 7% rate too, and I would probably start a laddered long-term lock-in at that rate. I'm making an assumption that (my) inflation will average 3% in the long-term and that my average draw will not be more than 4%.

[wabmester]

Quote:

Originally Posted by Apocalypse . . .um . . .SOON Someone here said that if long rates ever go to 7% there would be a big pile on.* I may go way out on the curve if that happens--and it will when the US$ drops.

In case you guys haven't noticed, the longer-term rates haven't budged. They're still at the same point they were at the beginning of the year. So far, the expectations for longer-term inflation are still rock-bottom low. Everybody believes that the fed has an inflation nuke that will Whip Inflation Now when deployed, so you may never see the longer end of the curve go up unless inflation demonstrates that it is impervious to fed action (or if demand drops way off, and real rates start creeping up).

[greg]

Quote:

Originally Posted by wab In case you guys haven't noticed, the longer-term rates haven't budged. They're still at the same point they were at the beginning of the year. So far, the expectations for longer-term inflation are still rock-bottom low. Everybody believes that the fed has an inflation nuke that will Whip Inflation Now when deployed, so you may never see the longer end of the curve go up unless inflation demonstrates that it is impervious to fed action (or if demand drops way off, and real rates start creeping up).

Wab: I'm of the firm opinion that "the Greenspan Conundrum" is self inflicted, that not only our country but just about every other one has flooded the markets with so much money that it now gravitates toward US bonds, keeping rates low. This too shall pass.

--Greg

People talk as if interest rate changes are easier to predict than stock market changes. I'm not so sure anymore.

[greg]

T-Al: Who knows for sure? But we do know that Greenspan is currently taking away the punchbowl.

--Greg