Where Do You Park Your Cash These Days?

[Montecfo]

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-------------- RPHIX (RiverPark Short Term High Yield Fund Class Institutional) Please. "High Yield" means junk bonds ("exposure to junk-rated credits rose to 79% in December 2020") "Institutional" .. minimum investment $100,000

If interested you should read the Morningstar. This is not your typical junk bond fund. It is small and very low duration (90-120 days or so). They buy small issues after heavy research convinces them the issue will be funded at maturity or redemption. It is a very steady fund and low duration means very little rate risk. Investor class is RPHYX, minimum a few thousand. Yields around 2%.

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FRA (BlackRock Float Rate Strat) An interesting CEF, 6.4% discount to NAV. Distr rate 6.11%. Clearly not your typical fixed income investment! The distribution rate at NAV is 5.72%, which is not sustainable. Indeed the NAV was 20.00 in 2003 and is 14.00 today.

It is a tactical investment for the current environment. Bank loan fund with credit risk, but little interest rate risk because of floating rate terms. And the credit risk seems manageable in this unique environment with growing economy and compliant Fed. And at a discount to NAV. I began buying it in January and it is up 8 percent this year-to-date in addition to the 5-6 percent yield.

[sengsational]

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Originally Posted by Golden sunsets What am I doing wrong. Morningstar tells me that the SEC yield on FLOT is .15% and on FLRN, the SEC yield is .21%. Both better than .01, but not a windfall.

So, yeah, is the 0.7% what you'd get, or what you might get?

[audreyh1]

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Originally Posted by Golden sunsets What am I doing wrong. Morningstar tells me that the SEC yield on FLOT is .15% and on FLRN, the SEC yield is .21%. Both better than .01, but not a windfall.

Why accept such paltry yields in volatile and risky credit investments when you can get 0.5% or better FDIC insured in a high yield savings account or short-term CD?

As you can see here the FLOT dividend yield is dropping, dropping, dropping. https://ycharts.com/companies/FLOT/dividend_yield

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Originally Posted by sengsational So, yeah, is the 0.7% what you'd get, or what you might get?

It’s what you used to get, in the past.

[Montecfo]

yes. Why do paltry with inflation at 4-6 pct?

[jazz4cash]

My single state muni fund NAV has ticked up a tad lately. It still throws off 2% distribution yield which is tax-free to me. Not bad. Still have some 3.7 and 3% add on CDs for maturing CDs so I will allocate among these 3 options.

[DangerDad]

VUSFX — Vanguard Ultra-Short-Term Bond Fund

Cheers,
DangerDad

[rayvt]

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Originally Posted by DangerDad VUSFX — Vanguard Ultra-Short-Term Bond Fund

Interesting, but Vanguard says "Because the Ultra-Short-Term Bond Fund will subject investors to principal risk, the fund shouldn’t be viewed as a substitute for a money market fund."

Sadly, there just aren't any good options these days.

[DangerDad]

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Originally Posted by rayvt Interesting, but Vanguard says "Because the Ultra-Short-Term Bond Fund will subject investors to principal risk, the fund shouldn’t be viewed as a substitute for a money market fund." Sadly, there just aren't any good options these days.

Yup—I saw that before I invested. The principle risk is very small but not zero. For me that small risk is acceptable. Perhaps for you it isn’t.
Cheers,
DangerDad

[RobbieB]

I just park my cash in checking / savings at the bank, about a year's worth. Get a whole tenth of a percent. I don't care, it's there to spend anyway.

The market makes me dough, the bonds are for stability and the cash is to blow.

[Timeisprecious]

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Originally Posted by racy Personally, I've given up chasing around a few basis points for my cash. I tell myself the low return is the price I pay for FDIC safety; kind of like paying for insurance.

+1. We're currently getting 0.57% at Vio Bank with FDIC protection.

[dixter]

just saying.... Ford Motor Co. issues corporate bonds for their Union Members to buy.... and anyone can also buy them...

The coupon rate is 9.98% CUSIP 345370BW9

another option if you like to travel is to put money into a bank account that pays you interest in the form of flight miles from American Airlines...

Bank Direct is the banks name... its online so any one can use them....

[Timeisprecious]

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Originally Posted by jazz4cash My single state muni fund NAV has ticked up a tad lately. It still throws off 2% distribution yield which is tax-free to me. Not bad. Still have some 3.7 and 3% add on CDs for maturing CDs so I will allocate among these 3 options.

Wow! 2-3.7% on your loose cash? That's really excellent! I purchased an 18-month and a 5-year CD from NFCU nearly two years ago at 3% and 3.25% respectively; I wish now I had put more into them. That 5-year 3.25% investment looks pretty darn good these days! But - it's a non add-on. Rats.

[Chuckanut]

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Originally Posted by dixter another option if you like to travel is to put money into a bank account that pays you interest in the form of flight miles from American Airlines...

Possibly. Alas, the airlines have a tendency to devalue points every so often, so each point buys fewer loaves of bread travel miles than before. So it needs to be Earn and Burn to make interest in the form of miles work.

[FANOFJESUS]

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Originally Posted by RobbieB I just park my cash in checking / savings at the bank, about a year's worth. Get a whole tenth of a percent. I don't care, it's there to spend anyway. The market makes me dough, the bonds are for stability and the cash is to blow.

Robbie I know your spending is healthy. Just curious how many years do you keep in cash and bonds? I am setting my asset allocation and am looking for ideas.

[Stillwater007]

Uh, why not use HM Bradley which has a savings/checking account ranging from 0.5-3% right now. The less you spend in the account, the higher the percentage. Capped at 100k.

[BlueberryPie]

I do consider I-Bonds cash, they are just as easy to cash out as you might withdraw from a bank, after the first year ( you can't cash them out during the first year. You also lose 3 months interest during the first 5 years but that's pretty negligible, and they are tax advantaged).

If you have enough cash to build a ladder so that you can live with some of your funds being locked for a year, they are actually a great option, and at 3.54% about the best truth you can get with virtually no risk.
The return is variable, but guaranteed to keep up with inflation.

That's where I keep my emergency fund and my kid's college tuition (he is attending, not a long term 529 replacement).

There were times were I-Bonds when a better deal, and times when CDs had higher yields, but they are liquid enough that you can switch out of them if you get better options.

You can only buy $10k/person/year, so $20k per couple, $30K if you have a revocable living trust since it can count as another entity, you can buy them for kids )but they belong to them) and you can get an extra $5k from your tax return.

[jazz4cash]

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Originally Posted by Stillwater007 Uh, why not use HM Bradley which has a savings/checking account ranging from 0.5-3% right now. The less you spend in the account, the higher the percentage. Capped at 100k.

Uh, maybe cause I never heard of it before and looking at the website I’m really not sure what the heck it is. It is FDIC through a partner bank and with a minimum of .5% I am very interested! A hundred k cap is fine by me. Is there a catch?

[RobbieB]

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Originally Posted by FANOFJESUS Robbie I know your spending is healthy. Just curious how many years do you keep in cash and bonds? I am setting my asset allocation and am looking for ideas.

About 1 year cash in the bank and 5 years in muni bonds.

[cj1717]

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Originally Posted by audreyh1 I don’t worry about it that much. But I have plenty of high yield savings and short term CDs. Good enough for me. I move things around a bit if a special deal shows up, but generally don’t sweat it that much. There is a thread dedicated to finding the deals. https://www.early-retirement.org/for...re-107187.html

"But I have plenty of high yield savings"

Please share this option!

[audreyh1]

FDIC insured high yield savings accounts are available at online banks such as Ally Bank and Synchrony Bank. Depositaccounts.com lists them.