REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Check out this thread: http://www.early-retirement.org/forums/f28/historical-cd-rates-vs-inflation-66955.html
Can find average CD rates, and inflation rates, but not one combined, and I'm too lazy to plug in the numbers...
https://www.putnam.com/literature/pdf/II514.pdf
From 1985 to 2014 - Average real return of 1.48% for CDs. A zero real return over 40 years would provide a 2.5% SWR, so CDs may be able to improve on that, at least if we see average real CD returns into the future.
Quite a contrast in that table if you compare the first 15 years (positive returns every year) to the second 15 (negative returns 60% of the time). The big question is will the next 15 years look more like 85-99 or 00-14?
I'm surprised that there's any real return to speak of, though I can't argue with "the data".
It a secondary indicator. A good argument for your point of view would be that despite the 0 bound, banks are holding excess reserves still, to the dismay of fed governors. They can't seem to encourage the banks to lend full tilt - they are acting as if the reserve ratio is higher and it's limiting the money supply effect of the funds rate.
Sent from my iPhone using Early Retirement Forum
Perhaps neither. The link in your first post is a nice reminder that we don't need to be at either allocation extreme and can do quite well taking some risk without too much exposure to loss of capital or loss from inflation.Quite a contrast in that table if you compare the first 15 years (positive returns every year) to the second 15 (negative returns 60% of the time). The big question is will the next 15 years look more like 85-99 or 00-14?
Maybe it was just local but it seemed like you could easily find CD specials all the time back in the day. I remember having a CD somewhere around 2006-07 that was almost 7% though inflation was nowhere near that. There certainly wasnt a special when I reupped my last remaining CD. A generous 0.34% percent. Let the compounding begin!
Sent from my iPad using Tapatalk