Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Where do You Park Your "Dry Powder" Cash?
Old 08-23-2019, 08:57 AM   #1
Thinks s/he gets paid by the post
Qs Laptop's Avatar
 
Join Date: Mar 2018
Posts: 3,441
Where do You Park Your "Dry Powder" Cash?

If you are an investor that buys on corrections (or dips), where do you keep your "dry powder" cash?

If you have some cash on the sidelines waiting for the next recession, where do you keep it?
__________________

Age is a very high price to pay for maturity.
Qs Laptop is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-23-2019, 09:01 AM   #2
Thinks s/he gets paid by the post
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 2,464
Vanguard Prime Money Market Fund, VMMXX.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged

"All models are wrong, some are useful." - George Box
There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
USGrant1962 is offline   Reply With Quote
Old 08-23-2019, 09:02 AM   #3
Dryer sheet wannabe
 
Join Date: Jul 2019
Posts: 15
Quote:
Originally Posted by Qs Laptop View Post
If you are an investor that buys on corrections (or dips), where do you keep your "dry powder" cash?

If you have some cash on the sidelines waiting for the next recession, where do you keep it?
I keep the dry powder for buying stocks on dips in the brokerage money market.

For emergency fund and generally the cash portion of my assets, I keep that in Goldman Marcus money market account. At least it has been getting 2-2.5%.
Cichon_007 is offline   Reply With Quote
Old 08-23-2019, 09:12 AM   #4
Thinks s/he gets paid by the post
 
Join Date: May 2019
Posts: 2,637
I no longer keep any significant cash allocated to dry powder after determining it was a losing strategy. Time in the market beats timing the market.

https://earlyretirementnow.com/2017/...-cash-cushion/
GenXguy is offline   Reply With Quote
Old 08-23-2019, 09:40 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Aug 2013
Location: North
Posts: 4,023
I plow just about every dime I don't need into the market immediately when it is available. #accumulation

My ER fund sitting in Vanguard VMMXX. Not much either > 3.5% of total portfolio.

I don't wast time timing the market. Sometimes I dream about what that might look like and realize it could easily become a nightmare.

With 1 exception, I did it once, just to try it. Lol, yes I am THAT guy!
__________________
Time > $$$ ~ 100% equities ~ FIRE @2031
kgtest is offline   Reply With Quote
Old 08-23-2019, 09:47 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,654
We keep our dry stash ($250k) in cash in VMMXX. seems like a lot, but I like to have the cash available to by cars, and other big ticket items as well as funding the next few years without using any other nest egg funds.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
ShokWaveRider is offline   Reply With Quote
Old 08-23-2019, 09:51 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,668
I have about 10% of my stash in PMMF. I wish it yielded more than 2.2% but not today.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 08-23-2019, 10:17 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
Quote:
Originally Posted by USGrant1962 View Post
Vanguard Prime Money Market Fund, VMMXX.
Ditto.

Post age 70 mine is involuntary RMD.

heh heh heh - I agonize between 'blow that dough' and 'try to run up the score'. Ying and Yang wise.
unclemick is offline   Reply With Quote
Old 08-23-2019, 10:25 AM   #9
Thinks s/he gets paid by the post
Qs Laptop's Avatar
 
Join Date: Mar 2018
Posts: 3,441
I'm at Fidelity. I've got mine parked in Fidelity's Government Money Market Fund (SPAXX). This is the default position at Fidelity. Mostly US government securities it had a recent 7 day yield of 1.96%

There is also the Fidelity Prime Money Market Fund (SPRXX). Mostly invests in CD's (36%) and financial company's commercial paper (31%). It had a recent 7 day yield of 2.08%.

Moving into a little more risk, there is Fidelity Conservative Income Bond Fund. Recent 30 day yield of 2.29%. Basically ultra short term corporate bonds (mostly from banks) that are rated:
AAA...1.4%
AA....25.4%
A......35.1%
BBB.. 4.0%

Next move would be a low duration bond ETF, like Fidelity's FLDR. Had a recent 30 day yield of 2.66%.

Thinking I should be at least in Fidelity's Prime Money Market fund, SPRXX, but why not squeeze out a little more return with the next couple of options?
__________________

Age is a very high price to pay for maturity.
Qs Laptop is offline   Reply With Quote
Old 08-23-2019, 12:24 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
I don't keep cash as dry powder, but I have plenty of assets in bond funds. Cash doesn't do much, but just look: Today bond funds are UP over 0.4%. Can you earn 0.4% in one day in cash? I don't think so.

I will probably sell some bond fund shares on Monday to buy equities. This weekend I think lots of folks will decide to sell equities, so that Monday will be a good day for buying equities for the Tuesday dead-cat bounce.
LOL! is offline   Reply With Quote
Where do You Park Your "Dry Powder" Cash?
Old 08-23-2019, 12:48 PM   #11
Recycles dryer sheets
 
Join Date: Jun 2018
Posts: 441
Where do You Park Your "Dry Powder" Cash?

I have >5% in MM at 2%. I’m fine with this AA and gives me flexibility in downturn. Also have some JPM, which pays 3% dividend. I know dividends get folks riled up, but I like some from steady payers as alternative to MM/Bonds in this market.
WhenIsItTime is offline   Reply With Quote
Old 08-23-2019, 12:53 PM   #12
Recycles dryer sheets
 
Join Date: Nov 2017
Location: -
Posts: 220
Quote:
Originally Posted by Qs Laptop View Post
I'm at Fidelity. I've got mine parked in Fidelity's Government Money Market Fund (SPAXX). This is the default position at Fidelity.
Same here. Non-zero risk, but pretty low.
Cessna152 is offline   Reply With Quote
Old 08-23-2019, 01:02 PM   #13
Thinks s/he gets paid by the post
Qs Laptop's Avatar
 
Join Date: Mar 2018
Posts: 3,441
Quote:
Originally Posted by LOL! View Post
I don't keep cash as dry powder, but I have plenty of assets in bond funds. Cash doesn't do much, but just look: Today bond funds are UP over 0.4%. Can you earn 0.4% in one day in cash? I don't think so.

I will probably sell some bond fund shares on Monday to buy equities. This weekend I think lots of folks will decide to sell equities, so that Monday will be a good day for buying equities for the Tuesday dead-cat bounce.
The owning of bond funds brings up a point related to moving quickly to sell them and get into equities. If I'm in a bond fund and I want to buy equities I must first sell the bond fund, which will settle sometime after the close of the trading day and then buy the equities the next day.

However, if I sell a Fidelity bond fund and I buy a Fidelity equity fund or ETF I believe it would happen on the same day. So long as I stay within the Fidelity family of funds.

Is that correct?
__________________

Age is a very high price to pay for maturity.
Qs Laptop is offline   Reply With Quote
Old 08-23-2019, 01:07 PM   #14
Thinks s/he gets paid by the post
Qs Laptop's Avatar
 
Join Date: Mar 2018
Posts: 3,441
Quote:
Originally Posted by LOL! View Post
I don't keep cash as dry powder, but I have plenty of assets in bond funds. Cash doesn't do much, but just look: Today bond funds are UP over 0.4%. Can you earn 0.4% in one day in cash? I don't think so.
When I came over to Fidelity about 18 months ago, I put a chunk of money into Fidelity Total Bond fund in my IRA, basically as a safer place to put money and as a way to get some monthly income while avoiding taxation. Now I see that the fund has returned 10.0% over those past 18 months (or 6.67% annually) and is at 8.97% Y-T-D. That is outstanding!
__________________

Age is a very high price to pay for maturity.
Qs Laptop is offline   Reply With Quote
Old 08-23-2019, 01:20 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,708
Quote:
Originally Posted by GenXguy View Post
I no longer keep any significant cash allocated to dry powder after determining it was a losing strategy. Time in the market beats timing the market.

https://earlyretirementnow.com/2017/...-cash-cushion/
Same here, since 1993.
__________________
learn, work, save, invest, fire
CyclingInvestor is offline   Reply With Quote
Old 08-24-2019, 01:39 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
My brokerage offers several money market funds that pay from 2% to 2.2%. The maturity is usually one month to as short as less than 7 days.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 08-24-2019, 01:51 PM   #17
Recycles dryer sheets
 
Join Date: Nov 2011
Posts: 181
Synchrony Bank - Currently 2.2%
__________________
FIREd 2012 at Age 49
523HRR is offline   Reply With Quote
Old 08-24-2019, 02:40 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Quote:
Originally Posted by Qs Laptop View Post
The owning of bond funds brings up a point related to moving quickly to sell them and get into equities. If I'm in a bond fund and I want to buy equities I must first sell the bond fund, which will settle sometime after the close of the trading day and then buy the equities the next day.

However, if I sell a Fidelity bond fund and I buy a Fidelity equity fund or ETF I believe it would happen on the same day. So long as I stay within the Fidelity family of funds.

Is that correct?
One can exchange Mutual Funds without waiting for them to settle as long as one exchanges within the same family: FXNAX -> FSKAX for instance. The exchange happens at the next NAV calculation which is typically close-of-market.

One can also sell a bond ETF and immediately buy another ETF in most instances: AGG -> ITOT. The reason "most" and not "all" is one must avoid something called "free riding", too.
LOL! is offline   Reply With Quote
Old 08-24-2019, 02:49 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 11,197
Quote:
Originally Posted by Qs Laptop View Post
I'm at Fidelity. I've got mine parked in Fidelity's Government Money Market Fund (SPAXX). This is the default position at Fidelity. Mostly US government securities it had a recent 7 day yield of 1.96%

There is also the Fidelity Prime Money Market Fund (SPRXX). Mostly invests in CD's (36%) and financial company's commercial paper (31%). It had a recent 7 day yield of 2.08%.

Moving into a little more risk, there is Fidelity Conservative Income Bond Fund. Recent 30 day yield of 2.29%. Basically ultra short term corporate bonds (mostly from banks) that are rated:
AAA...1.4%
AA....25.4%
A......35.1%
BBB.. 4.0%

Next move would be a low duration bond ETF, like Fidelity's FLDR. Had a recent 30 day yield of 2.66%.

Thinking I should be at least in Fidelity's Prime Money Market fund, SPRXX, but why not squeeze out a little more return with the next couple of options?
FZDXX has a 2.23% yield at Fidelity, but need 100k.
__________________
TGIM
Dtail is offline   Reply With Quote
Old 08-24-2019, 03:20 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 7,271
We have a chunk sitting in a default Vanguard sweep account - looks like it has the same 7 day SEC yield as the other VG money market account right now. That will cover some buy orders we have in should the market drop like it did 12/24/18. Have a silly amount in short term CDs and savings accounts due to mature before the end of the year. I mean a really silly amount. Those bring in about 2.15% average. Some 5 year CDs at 3.5%.

I am reminded on a fairly regular basis that back in 2007 I opted to buy 6.25% CDs from PenFed for a 3 year term, not 6 or 7 or 10. Will I feel bad if interest rates continue to drop? I don't think so. Something to be said for having an available stack of cash.
__________________
"Be kind whenever possible. It is always possible." Dalai Lama
calmloki is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Whos got dry powder? Free bird FIRE and Money 53 02-08-2018 08:48 PM
When to fire your dry powder Gazingus FIRE and Money 52 10-19-2014 04:47 PM
Retirement "dry run". nun FIRE and Money 20 01-11-2013 10:19 PM
Keeping Powder Dry ripper1 FIRE and Money 32 12-31-2012 03:59 PM
Dry powder...when is the time? RockOn FIRE and Money 52 03-20-2008 12:14 PM

» Quick Links

 
All times are GMT -6. The time now is 01:30 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.