Where Do You Park Your Cash These Days?

[Pete10k]

It also took a hit last Feb. from ~$55 to ~$45 per share. Was that from panic selling?

The corporate and muni credit markets froze up for a few days due to pandemic. From CNBC on 3/17/2020:

“ The swift hit to the U.S. economy from efforts to stop the spread of the coronavirus has created a crunch in credit markets that threatens to turn an economic downturn into a financial crisis.

Companies have rushed to raise cash by drawing down credit lines and other borrowing, as they face a sudden shortfall in revenues. The ripple effect has been a whammy to credit markets, sending many spreads wider across the markets and even stalling out the commercial paper market, where the highest rated companies go for cash.

“We’re speeding towards one. We need to deal with this. This is real now. All the red flags are raised,” said Diane Swonk, chief economist at Grant Thornton.

The Federal Reserve on Tuesday said it would provide help to companies having a hard time getting the short-term funding they need.”

 

[Pete10k]

I'm going to give PIMCO Short-Term a try..it has a duration of 0.13 (!) and TTM yield of 1.64%. Has done > 2.3% avg annual return last 1, 3 and 5 year periods. Slightly under 2% (1.89%) avg/yr last 10 years..and 2.5 avg annual for the past 15. High ER, but those performance numbers are obviously net of ER..

Hard to beat PIMCO when it comes to Fixed Income. And in my experience, active management usually beats passive on Fixed Income as well (obviously opposite that when it comes to Equities)..

Good points about pimco and about active/passive and I agree. I’ll look into their muni equivalent. Thanks.

 

[GenXguy]

I'm going to give PIMCO Short-Term a try..it has a duration of 0.13 (!) and TTM yield of 1.64%. Has done > 2.3% avg annual return last 1, 3 and 5 year periods. Slightly under 2% (1.89%) avg/yr last 10 years..and 2.5 avg annual for the past 15. High ER, but those performance numbers are obviously net of ER..

Hard to beat PIMCO when it comes to Fixed Income. And in my experience, active management usually beats passive on Fixed Income as well (obviously opposite that when it comes to Equities)..

I get 3% in my fixed interest fund through my work retirement account - no expenses or fees on that particular fund. It's been that rate for quite a few years now.

 

[pb4uski]

You are very lucky... that is an outstanding rate for a stable value fund.

 

[RetiredAndLovingIt]

I had a 30 month CD at Freedom Credit Union at 3.5% that just expired yesterday. Without sending me any kind of reminder they automatically renewed it for another 30 months at 1.3%. I think I’m just going to cash out and move the money to municipal bonds. But I was surprised to see them offering me 1.3%. The highest I could find on bankrate was around 1.15% and that was for a six year CD.

Same thing happened to me however I e-mailed them with maturity instructions last week before they matured. They have since renewed the CDs and no response to either of my e-mails so I will be calling them first thing tomorrow. It's a decent amount of money and I'm sending it to my add on 3% GTE CD so I want my money ASAP.

 

[Finance Dave]

CD ladder mostly

Also just bought a private placement 3 yr SPDA that pays 1.7%

Bought a small amount of TIPS at original auction recently

 

[jazz4cash]

CD ladder mostly

Also just bought a private placement 3 yr SPDA that pays 1.7%

Bought a small amount of TIPS at original auction recently

Hmm....what do mean by "private placement"? I'm not familiar with that term in this context.

 

[RetiredAndLovingIt]

Same thing happened to me however I e-mailed them with maturity instructions last week before they matured. They have since renewed the CDs and no response to either of my e-mails so I will be calling them first thing tomorrow. It's a decent amount of money and I'm sending it to my add on 3% GTE CD so I want my money ASAP.

I called Freedom CU after no response to 2 e-mails and could not contact them on their messaging service either so I was getting worried. Was on hold for a bit but then got through to a real person. She apologized and said my account was dormant and said she would need supervisor approval to close them and transfer funds to my savings account. All in all it took a good twenty minutes and she was very nice and said I should always call them for changes to maturing CD's. I know I e-mailed them last year on one and got a response same day so they must have changed their policy but that's no excuse for not reading and responding to e-mails. As to dormant, I go in every month to get interest info and download statements when available so not sure how they could consider it dormant but I was in a real hurry and did not want to argue. For anyone that uses their add on CD's she said they would not be offering them any more after April this year. Existing add on CD's will remain the same until maturity.

 

[Ready]

I’m glad I’m done with Freedom CU. Their customer service is awful. They frequently ignore emails and it takes 30 minutes to get a live person on the phone.

 

[a60dan]

Discover Bank online savings account... drifted down to 0.45%

Dominion Energy Reliability Investment Notes and Toyota IncomeDriver Notes.... can deposit or withdraw at will like a savings account but obviously not FDIC insured... sound similar to your Ally Demand Notes... currently paying 1.5%

I have a lot parked in Vanguard Short-Term Federal Fund Admiral Shares (VSGDX) awaiting investment in equities... 30 Day SEC yield is 0.72%... distribution yield is 0.46%... portfolio yield to maturity is 0.60%... ER is 0.10%.

VSGDX looks like a good option as I struggle to balance risk and "reward" for the ~1 year of cash we want to maintain.

How long have you been invested in it, and are you still happy with it?

It looks like an ETF, and has been around since 3/2011. It also looks like response to the sell-off 3/2020 was attenuated and something I could stomach the next time

 

[a60dan]

Good points about pimco and about active/passive and I agree. I’ll look into their muni equivalent. Thanks.

SMMU PIMCO SHORT TERM MUNICIPAL BOND ACTIVE EXCH TR FD looks like the Municipal Bond ETF.

I'm still looking for the taxable version on Fidelity.

 

[gooddog]

A quality preferred dividend ETF is a good place to make a decent percentage without too much risk. Ticker PSK has been a very good place to park cash for me.

 

[yakers]

PSK in taxable or IRA?

 

[gooddog]

PSK in taxable or IRA?

I got a bit of it in both. Have PSK, XLU, SPHD, and other div paying stocks in both taxable and non-taxable accounts.



Bought some SPACs in the ROTH, as there is a chance they go up a lot (got in on QS when it was KCAC) - that went up 13x in just 60 or so days...don't want to pay taxes on that for sure.

 

[pb4uski]

VSGDX looks like a good option as I struggle to balance risk and "reward" for the ~1 year of cash we want to maintain.

How long have you been invested in it, and are you still happy with it?

It looks like an ETF, and has been around since 3/2011. It also looks like response to the sell-off 3/2020 was attenuated and something I could stomach the next time

Only since April of 2020, but overall satisfied. Total return has been ~2.28%. Mostly interest and STCG distributions.... some realized gains... ~1.6% absent the realized gains.

 

[aja8888]

Rather than start a new thread.....In my IRA I have $250 K in cash just sitting there. I want to get it paying better than 0.01% (LOL). I was looking at a treasury bond ladder of 5 years with would pay out 0.47% or about $5600 per year cash flow per year for 5 years. I think some of that cash flow is accrued divs that came with the purchase of the bonds. The bond ave duration is 3 years in the ladder and the coupons are about 2.1%.

This is money from matured CD's. I have enough in stocks and I am looking at this as part of my fixed income bundle.

Anybody got a better idea?

Oh, I am almost 77 so no real long term stuff is on my radar.

 

[rayvt]

FLRN (SPDR Bloomberg Barclays Investment Grade Floating Rate ETF)
Current yield 0.68%

or FLOT(iShares Floating Rate Bond ETF)
Current yield 0.71%

Low volatility aside from a glitch in March 2020. You want to keep the duration low.

These are where I keep my IRA cash, since the broker's cash rate is like 0.01%.

Other than that, Alliant CU pays 0.55% in savings account, but you can't really do that with an IRA.

 

[chassis]

FLRN (SPDR Bloomberg Barclays Investment Grade Floating Rate ETF)
Current yield 0.68%

or FLOT(iShares Floating Rate Bond ETF)
Current yield 0.71%

Low volatility aside from a glitch in March 2020. You want to keep the duration low.

These are where I keep my IRA cash, since the broker's cash rate is like 0.01%.

Other than that, Alliant CU pays 0.55% in savings account, but you can't really do that with an IRA.

Great tip, thanks @rayvt

 

[aja8888]

FLRN (SPDR Bloomberg Barclays Investment Grade Floating Rate ETF)
Current yield 0.68%

or FLOT(iShares Floating Rate Bond ETF)
Current yield 0.71%

Low volatility aside from a glitch in March 2020. You want to keep the duration low.

These are where I keep my IRA cash, since the broker's cash rate is like 0.01%.

Other than that, Alliant CU pays 0.55% in savings account, but you can't really do that with an IRA.

Thanks, I'll look into those.

 

[chassis]

VCSH is another one to consider. Higher yield and lower costs than FLOT.

 

[Chuckanut]

Rather than start a new thread.....In my IRA I have $250 K in cash just sitting there. I want to get it paying better than 0.01% (LOL). I was looking at a treasury bond ladder of 5 years with would pay out 0.47% or about $5600 per year cash flow per year for 5 years. I think some of that cash flow is accrued divs that came with the purchase of the bonds. The bond ave duration is 3 years in the ladder and the coupons are about 2.1%.

This is money from matured CD's. I have enough in stocks and I am looking at this as part of my fixed income bundle.

Anybody got a better idea?

Oh, I am almost 77 so no real long term stuff is on my radar.

I think Marcus Bank currently offers an 18 month CD at 0.7%.

 

[pb4uski]

Rather than start a new thread.....In my IRA I have $250 K in cash just sitting there. I want to get it paying better than 0.01% (LOL). I was looking at a treasury bond ladder of 5 years with would pay out 0.47% or about $5600 per year cash flow per year for 5 years. I think some of that cash flow is accrued divs that came with the purchase of the bonds. The bond ave duration is 3 years in the ladder and the coupons are about 2.1%.

This is money from matured CD's. I have enough in stocks and I am looking at this as part of my fixed income bundle.

Anybody got a better idea?

Oh, I am almost 77 so no real long term stuff is on my radar.

Check out some of your local credit union CDs.... First Community CU is offering 0.9% on a 5 year CD over $100k.... ditto MemberSource CU. And NFCU is up to .95% for a $100k 5 -year CD.

A 5-year CD ladder at NFCU would be about 0.73%.

 

[pb4uski]

Or better yet: https://www.depositaccounts.com/cd/5-year-cd-rates.html

 

[Surewhitey]

We have a couple of banks that pay out 1-2% on deposits up to $15-30k...our emergency fund.

A chunk over that, DW wanted a "safe" investment, so I split it into these Vanguard funds. Very low fees and beta. Also count for our bond allocation.

 

[aja8888]

Thanks for the suggestions for bank CDs, but as I said in my post, the $250 K is in my IRA.

The only CDs I have access to in my IRA are brokered through Schwab unless I pull the money out and pay ordinary income tax on it which is not what I want to do with the funds.