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03-12-2023, 03:09 PM | #13321 | |
Why so serious?
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Huge institutions invest with money managers all the time - it’s their easiest avenue to deploy capital into the markets - and they definitely aren’t spreading out a $5bn allotment amongst a thousand different managers. |
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03-12-2023, 05:07 PM | #13322 |
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03-12-2023, 05:56 PM | #13323 |
Why so serious?
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It's a bailout to provide insurance for a fee? I guess.
Your job that I presume you have right now wouldn't exist if the government hadn't taken those steps. Insured depositors in those same banks wouldn't have been made whole if the government hadn't taken those steps. |
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03-12-2023, 06:06 PM | #13324 |
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Twisted,
I assume you are talking about funds like VMRXX, VMFXX, or VUSXX. Is that right or is there something else that you'd recommend parking extra cash in with Vanguard? And if it is funds like that trio, is there one that you recommend over the other? Thanks. |
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03-12-2023, 06:12 PM | #13325 | |
Why so serious?
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Quote:
And yes, those funds. By virtue of my job I tend to keep more in cash than what anyone would recommend, and 4.5-5% seems delightful relative to some riskier things that I get pitched with IRRs maybe 2x that. |
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03-12-2023, 06:17 PM | #13326 |
Why so serious?
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In any case, government stepped in to make uninsured depositors in SVB whole. If the government loses money, they essentially tax the banks.
Fed comes out strong providing liquidity to other banks who may experience outflows. Outflows will happen but this is still best case scenario for weaker banks. I'm sure this story will still percolate and simmer but the tail risks meaningfully reduced in my mind. |
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03-12-2023, 06:48 PM | #13327 | |
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03-12-2023, 06:59 PM | #13328 |
Seize life. Be an ermine.
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I've got a big clump of money in one private online broker, which makes me a little nervous. It just kind of happened for various reasons. I keep pondering whether I should move some to another broker just to be sure no catastrophe strikes. Should I? It sounds like I shouldn't be worried that one of the big mainstream brokers will suddenly go belly up.
I would have never used the words "CDs" and "bold" in the same sentence before, but I'm making a bold move into CDs. I've been buying them on 1-5 year time frames with the plan that inflation will go down and I'll end up with CDs that are beating inflation. I think it's a reasonable bet, and my goal is just to match or beat inflation at this point. I think rates are still going up, so I'm buying into them somewhat slowly right now. I'm not putting anywhere near $250k into any one CD, but they're mostly going through the one brokerage, so I hope that's not a risk.
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03-12-2023, 07:09 PM | #13329 | |
Why so serious?
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03-12-2023, 07:24 PM | #13330 | |
Seize life. Be an ermine.
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I keep looking at Treasuries, but I don't know enough about them. The second photo is what I see when I do a search. I used 2-year Treasuries to be consistent across both pictures. I don't understand what the variables are. I tried looking them up, and the key to me seemed like the "Yield to Worst", which was explained as the worst-case scenario yield. But that implies that there are situations where I can do better than that. And the Coupon seems important because I read that that's the nominal rate, but they're all over the board and I don't know what that means. Why would I be expecting a 4.679+ return off of a bond that has a 1.125 percent nominal rate? I'm sure I'm misunderstanding something. What I see is that the CD rates are higher and I understand them, so that's what I've been buying. Can you explain why Treasuries should be considered when looking at the two pictures below? Thanks in advance.
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03-12-2023, 07:35 PM | #13331 |
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Here's something I find kind of humorous. I saw that 5-year CDs were being offered up to 5.4 percent, so I looked at them. The top offerer is the "Bank of Bird-in-Hand".
Does that sound scammy or what? So I looked up this bank, and it turns out that it's a small bank that's located in the town of Bird-In-Hand, Pennsylvania. It caters mostly to Amish people, and in fact their drive-through window is designed to accommodate horses and buggies. I might have to put a little money into this Amish bank's 5.4 percent rate.
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03-12-2023, 07:39 PM | #13332 |
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I would go with that bank. After all, it's better to have an account with Bank of Bird-in-Hand than two at Bank of Bird-in-Bush.
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03-12-2023, 07:41 PM | #13333 | |
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I wonder if the Bank of Bird-In-Hand will give me my monthly dividend in $20 gold pieces. Because that would be kind of cool.
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03-12-2023, 07:53 PM |
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This message has been deleted by Hog's Gone Fishin.
Reason: More good info , only Rainman worthy
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03-12-2023, 08:07 PM | #13334 |
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Yeah, I've been buying those. I'd buy them all day except there's an annual purchase limit that's pretty low.
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03-13-2023, 09:49 AM | #13335 | |
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It seems weird to me that a bank of all placed would tie up capital for the long term. I know that when interest rates didn't move for basically 20 years, it would be easy to get out of them, but as inflation poked up on the horizon (long before rates took off) that they would have unwound them, at least some of them. I'm an idiot, but that's the way I see it. |
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