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Staying Invested – Easiest in Years

We look back 2 years ago and what do we see? Cash in brokerage accounts earning .01%–or some crazy number. We all lamented the lack of decent coupons on new preferreds and baby bonds being sold with lousy coupons–i.e. REIT Hudson Pacific (HPP) selling a perpetual preferred with a 4.75% (HPP-C), Bank OZK selling a non cumulative perpetual preferred with a 4.625% (OZKAP)—you can see new issues back to late 2021 here.

Now we can get over 5% on a CD–not something that is massively attractive in a high yield world–but certainly an option on a relatively short term basis. Money market rates of over 5% are also available. Yet with the options available I know we still have some folks that are sitting on too much ‘cash’–I mean true cash. This isn’t necessarily cash in brokerage accounts, but may simply be cash in your checking account that is paying you little or nothing (although there are certainly checking accounts paying decent interest-but not at my little local bank)–and the banks love you!! Thank you Mr/Ms customer–we love you for giving us money for free that we can lend for 8%!!.

Relative to the above I plead GUILTY. Both my wife and I keep way too much money in our personal checking accounts. Why? In the age of electronic transfers it only takes a half dozen clicks to move the money to a brokerage account where I can earn a minimum of 5% with safety. Little details like this costs investors very substantial income — are we all so wealthy we like to just ‘give money away’? My goal for today is to move money from my checking account (just mine–my wife is a different story) to my cash brokerage account–I’ll take that extra $100/month income! Time invested–maximum of 5 minutes.

The point is that we all spend lots of time researching preferreds and baby bonds–but sometimes we have ‘free money’ right under our nose.

Well today in 30 minutes we have the weekly 1st time unemployment claims being released–plus the ongoing claims number. To me this is a most important number-partially because we get it every week, but also to my way of thinking nothing identifies economic health better than employment. I think the Fed people think the same thing–previously they have pretty much said that is the case–but now they have backed off that point of view. Just the same give me the numbers and let my simple mind scrutinize them and make my relatively short term predictions–i.e. 3 months.

Equity futures are flattish (again) this morning with the 10 year treasury at 3.81%–no reason to think that we aren’t looking at another quiet trading day–that is fine–we collect dividends and interest payments tomorrow or Tuesday–always a good day.

48 thoughts on “Staying Invested – Easiest in Years”

  1. Your comments reminded me of “back in the day” , in my 30’s and early 40’s, when I planned for the total breakdown of society.

    I had two Swiss bank accounts (one numbered) with gold and Swiss currency plus one in The Netherlands with gold. I had passports for my two youngest kids although they were not required at their ages. I had evacuation plans for my family to escape to Switzerland. I had gold coins at home as I thought U.S. currency might be useless because of inflation. I had a shotgun with lots of ammo plus a 9mm sidearm to defend my home from the ‘have-nots’ who might attack if I was not able to flee.

    In retrospect, I was definitely semi-paranoid. Or, as my wife said, totally paranoid. I look back on those times and must admit I chuckle a little bit.

    1. That reminded me of the people who owned 20 guns to prepare for the worst and ran out of toilet paper during the COVID lockdowns because they had 10,000 rounds of ammo stored but only 10 rolls of toilet paper….
      And see my comment about the price of FXF…

      1. John, That contractor in LA building safe rooms or shielded bunkers just came in today and bought another 6 rolls 6# lead 48″ x 25ft paid cash to the distributor and had a bigger vehicle this time so he could w/c all 3,600# at once.

    1. The drawback of raisin.com is that you can only link to one external account.

      I think maxmyinterest.com is a better product despite a slightly lower net APY (5.20%).

      1. Another downside is that sometimes Raisin’s web site has errors.

        When they first set it up, if I attempted three transactions in a day, there were hiccups, such as messages that were unclear to me and which included an ask that I confirm the dollar amount of today’s transaction – but there were three, which one was the right one??

        And this morning, it seems to have forgotten that I have money there.

  2. Tim, you mention the economy is great, but for people without a lot of disposable income wouldn’t agree. There is a disconnect between the market and the real economy which can happen. I typically like to keep it real regarding reality and take advantage of whatever the market does regardless of the underlying foundation. Appears like 2000 and 2008, but I go with the folks who say history rhymes versus repeats. We may see something new this time.

    1. Hi legend.vs – I agree there are plenty of folks that are living on the edge–for many, many different reasons. My wife and I talk all of the time how fortunate we are–I recognize this isn’t true of everyone.

  3. Why not just use the checking, deposit and bill pay services of your brokerage account? That way you can always get at least 5% currently on uninvested funds?

    1. J, you are getting way too techie for me, ha. I totally cant let go of the 1980s. I keep some cash at home, some cash in my car, some extra hidden in my wallet, keep some extra in my checking and worthless saving accounts. And if things got bad, I could dig into my $1000 plus coins sitting in a bucket at home. I could grab a couple free very nice steak dinners with wine if I had the withitness to do what you mentioned.

      1. What no apocalypse cash sitting in a home safe, Grid? I’ve got that as well, as if anyone would take green pieces of paper in exchange for food, soap or toilet paper then… lol

        1. 2WR, you know I actually havent thought deep enough to consider the zombie apocolypse. I have enough ammo for a few miscreats entering the house but not an army like my brother does. Actually I guess it stems from pre bank teller machine days….And more importantly my forgetfulness. Having cash in my car has saved my bacon more than once forgetting my wallet. Actually every now and then a place will have their credit card machines go down and cash saved the day. Last spring I was in a clothing store buying a shirt. All the younger people had to leave empty handed as all they carry is plastic. The few actually walking out of the store with items in hand were older people like me. Imagine that, stereo types occassionally hit the mark.

          1. I used to keep a C note hidden in my car. My paranoia was being a good distance away from home and losing my wallet.

            As for a previous comment, paying bills online is faster and easier than an old fashioned checking account. And with direct pay, there are even fewer bills to pay.

      2. hahaha – I have a few hundred ounces of silver at home in old US coins (most I have found metal detecting of all things) and silver bars from 1 to 10 oz. Once, I ordered out for delivery for some sushi rolls and forgot to put a tip in with the order. I DO NOT KEEP CASH so I had no way to tip the guy, who was obviously in school at the local college and delivering food for some extra income. I went to my cigar box where the silver was stored and got out a 1-oz bar of silver and asked if he would take that as a tip – I told him it was worth about $25. He was excited about that and gladly accepted it. So, I guess that Ag horde will actually work if times get tough!

        1. Yazzer, I hesitate to even reply as this is a much longer and deeper conversation. I have an incredible amount of precious metal (mainly gold/platinum/palladium/rhodium), that I have accumulated over many decades. I am ALWAYS trying to get away from the dollar, as world governmental inflation and “other factors” create issues/losing buying power each year. Too much to say and not enough time to explain here. When I had my weekly call in radio show for many years, people would call in and make insane claims about the dollar, zombie apocalypse, new world order/government and every conspiracy theory you could imagine. It was good for a laugh after the show(s), but you soon realize there are a ton of people that really believe this stuff and live their lives by these extremist beliefs. I’m NOT judging anyone as only G-d knows the absolute truth.
          Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.
          I am Azure

          1. I had a bunch of Krugerrands that I bought 20+ years ago for maybe $300 apiece. Yep, the whole collapse of society thing. About 10 years later I was trying to buy an investment property and since gold was pushing $1700, I sold them all. Unfortunately, there deal fell through. I also realized that if society collapsed, gold really wouldn’t solve the problem.

        2. The above references to silver coins brought back a lot of memories. In the late 60s I designed electronic test equipment for the metals industries. Using eddy current technology these machines were used to sort alloys, hardness and crack detection. We had a guy come to us who sold mechanical coin sorters supposedly to the banking industry. He wanted to have a sorting machine on the output stream of his machines that would sort the pure silver dimes and quarters from the clad coins. It wasn’t a hard application to do and we built several machines.
          That gave me the incentive to start collecting silver coins. I didn’t accumulate a lot but enough for a little nest egg which I still have. Wish I’d collected more but as a young engineer at the time didn’t have a lot of extra cash. I’ve also done some metal detecting as noted but never found many true silver coins in the many coins found. Based on my metal detecting I would hate to guess how many megabucks of coins lay in the ground across the country.

          Back to the coin sorters for the “rest of the story.” Some of the machines did end up at banks but we soon learned some were in the hands of the mafia. We started having shady characters show up at the plant late in the day or even after hours demanding to have a machine repaired as “ they had a garage full of coins to sort that night” evidently from vending machines. We further learned that some of the sorted silver coins found their way overseas where they were melted down.
          Hold on to your silver!

          1. Ken, thank you for sharing your great story. I’d love to have one of those machines, as when my father passed away I found inside one of the warehouse out buildings over $200K face worth of coins that were just piled up and should have been sorted to look for silver. I bought an old/used UHaul truck (because Brinks and Loomis wouldn’t deal with me because I didn’t have an account with them). My employees transported all the coins we put into BofA supplied bags (this was during Covid) and started taking them to the bank. Needless to say the bank employees hate me and I don’t go back to that Bank America branch anymore 🙃

            1. Why did BofA hate you? Because they had to do some work on processing the coins? I know it is a travesty for some people to actually work… The entitlement movement is taking shape. If you have to move or apply labor is being revisited for its true intrinsic value.

              1. Ha, I have seen that look bringing in a bunch of coins before. A separate time my brother was paying off some loan money to our dad. And he wanted to whittle it down extra by giving him a 5 gallon bucket full of coins a few years ago. I was volunteered to carry the big load into the bank. That particular bank employee didnt give us that funny look, she just pointed to coin counter machine around the corner and we had to do it all ourselves.

            2. Curious, did you have any problems when the bank notified the IRS or who ever that you deposited more than 10K which has to be reported? I’ve accumulated more cash than I should have and am worried about making a large deposit but no where close to what you deposited.

              1. The report is a threshold. It is for risk mitigation and for someone to look into fraud. This is why your bank gets to know you. What is your income? what are your businesses? how much do you deposit / month? What is the money flow look like? blah blah blah. It is not for tax purposes but for fraud. Banks can get fined for millions if they dont have policies and procedures to look for suspicious deposit amongst other things.

    2. To me, J, I WANT the separation of investment funds from day to day living expenses that would be covered by check writing and bill paying. It makes it easier to track how I’m doing. So I’ll always keep them separate but I will search around for the highest rates I can find for my Safety Joe stash that’s outside my investment funds. Right now Everbank is paying 5.15% on a savings account for example. And while we’re at it, I’m also not a fan of those services that allow you to consolidate your ability to view all your various financial accounts in one spot online. Maybe I’m just paranoid, but that that seems to be a major security risk I won’t do in the name of convenience.

    3. jtrader–because I have always been lazy about those accounts. Plus I want to bank locally – small town with folks I know. It makes a difference if you own a small business in a small town.

      I am working to change some things – already transferred $$$ to eTrade this morning.

      1. community is important, especially when we take can help folks.

        *warning – long off topic story follows*

        I spent the last three and a half days playing walt-the-woodworker to help out some people we put in the business about 20 years ago.

        In the ’90s, my brother and I set up a small mfg co. “on the side.” We had a small shop and contracted out a lot of projects to retired guys (mostly engineers) who had time on their hands. Nice business – 300-400% profits selling to dot-com companies. After the bubble burst, we gave the wood mfg business to our shop foreman and his wife (who ran our office). They have done well, but last Friday, he fell off his mom’s roof and broke his leg and some ribs. His wife called in a panic because they had big orders that had to go out this week (to book YE revenue and keep their bank happy).

        So, I called the retired guys who now work with him and we took over the shop. We know his employees (and his boys who were home for Christmas), and we just all worked together. A couple of retired guys took over the CNC machine (way beyond me) and one of my sons (who is CTO of a multibillion dollar software company) ran (and fixed, and updated) the mess of spreadsheets we had built in the 90s that we laughingly called our shop-floor control system.

        I gotta tell you, it was a lot of work. I can barely walk, but also a lot of fun. We got everything for this week and half the stuff for next week finished and packed for shipment today.

    4. I also use a 2% cash back CREDIT CARD as much as I can and get paid over $1000-$1200 back every year – never missed a payment in 7-odd years. It pays my electric all year. Recently, the PayPal mastercard has offered 3% cash back on everything using it thru Paypal so I added that capability. So, I am averaging almost 2.5% cash back overall. This is equivalent to maybe 3-3.25% as that “income” is not taxed and it’s money I have to spend anyway. FREE MONEY on the backs of all those folks who keep running balances on their CCs. I am working all the “angles” mentioned here as well. It helps keep my FICO score north of 820 as well.

      1. Hmmmmm, I hadn’t noticed that about PayPal’s mastercard. I see it’s 3% only on stuff bot using PayPal, but still 2% on everything other mastercard purchase… I have a 2% back card as well, but this does seem worth investigating…… thanks for the post

      2. Yazzer, I agree. Free and tax free too! Over the recent years, my 2% has bought me a refrigerator, a washer and dryer, and a 2 seat recliner last month for my man cave. I keep cash around, but I buy everything I can on my 2% cash back and pay in full end of month. I have about $300 still unused as I type. I have to watch restaurants though as some are surcharging for credit card use though.

      3. FWIW, Capital One offers a 5% cash back card for purchases made at Walmart grocery stores. Food is a big ticket item so the annual savings is significant. Amazon has a 5% card as well.

        As an added bonus, I have groceries delivered from Walmart. It’s $98 a year but one of my cards offers that for free. Not only are the prices lower than local grocery stores but the time savings is huge. And the return policy is tops.

  4. Such great points, earlier this year as I noted here I moved a nice chunk of savings money from Discover ‘high yield’ savings to SPAXX and some s/term Tbills thru the year from that money. I keep the ckg bal low, easy to put it in. Now I am faced with the ‘problem’ (I set an alarm on my calendar) of SS pmts coming to me ea month to the ckg. So that has to get moved somewhere once deposited. I had life settlement money from a life ins policy I was bene on sitting at the insurer earning 3.5%– well that was nice then but not now.
    So that money got moved. We talk about the pennies on here a lot but they do add up. Now if I could only get mom to move the CD money and money from the life settlement a/c she has for a higher rate–but it is worth sacrificing the pennies to not aggravate a 90 yr old! lol. With POA I could do it but don’t want to upset her.
    Slowly moving that 5% mmkt money to pfds and a few other income names. Appreciate all the ideas here from Tim and others! Bea

    1. Bea – moved money from my checking to etrade 5 minutes after posting the note this morning. I can relate to your mom – mom was 91 when she died a few years ago and the last few years she didn’t care what (if anything) she earned on funds–she had no intention on spending what modest amounts she had and simply didn’t want it going backwards.

      1. are you seeing any increase in activity in home sales Tim w rates down; apparently supply is still very thin. Talking heads seem to think mtge rates down is helping buyers, moving some sellers?

        1. Bea–nothing for sale and earlier this week I did my last appraisal I had on hand–never had that in 25 years.

          I did get a purchase appraisal late yesterday – so I have 4 hours worth of my day job work now.

      2. It must be an age thing. My buddies dad is 86 and an old school farmer. 2 years ago literally had $500k sitting drawing almost nothing in a couple local banks. He couldnt get him to move the money into TBills, until he off handed mentioned I said he should. To his surprise he agreed to after he knew I said he should. So now my friend says anytime his dad wont agree to what he asks, he invokes my name and he then agrees. A classic father-son butting heads thing I guess.

        1. Grid,
          It is indeed an age thing. As of today I am 75, I have followed your line of thought on a few things and made some decent money 🙂

          1. Happy Birthday Bill! I have a golfing buddy who also is 75. The other day he gave a memorable line I liked. “Life is like a roll of toilet tissue. It goes quicker at the end”.

  5. Little more patience Tim, I have my credit union linked to 2 of our accounts. Clock is ticking and I plan on moving the max allowed for my IRA contribution after New Year’s day and a matching amount to a regular brokerage account. Just a little dry powder to wait to see if there is a market drop in the next 30 to 45 days from a dysfunctional congress.

    1. Charles–my accounts are linked so just a couple clicks to take care of it – just the same I always wanted more emergency money at my finger tips than I could ever need so there it sat.

      1. You mention using Fido. Fido is pretty fast and highly liquid for my conf decent sums of money around.

        Fido checking used multiple banks for deposits so your fdic limit is in reality much higher than if it was just a single bank. In properties they should tell you which banks and how much is deposited with each.

        1. I recently had a major regional bank close an account of mine that I used for moving money in and out of investments. They gave no explanation for the closure. I spent a couple of days visiting local banks, lookingfor an alternative but then I realized I could just use an existing Fidelity account. The cash is earning market rates (5% now), it’s easy to do ACH payments and wires (free!), easy to buy CD’s, stocks and Treasuries, checks writing is included and I can receive ACH payments from my investments, as well. The only thing it doesn’t do well is cash handling for which I use a local bank and then ACH between the bank and Fido. Made me wonder about the long term viability of brick and mortar bank branches!

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