Only about a 4% buyback yield, but it’s outpacing their earnings yield which is interesting.
Unemployment surprisingly up a tick, stonks stonking.
When they actually do rate cuts shit is gonna RIP.
At least initially, then I think all bets are off. The S&P is at nearly double it’s historical median PE. If/when it rips, it’s going to be in bubble territory pretty fast unless earnings rip too, which I doubt.
Things are super weird in trucking in that rates are very low but actually getting capacity is pure chaos. Definitely feels bottomy unless the economy really takes a shit.
Reminder that anybody with significant funds in a traditional savings account right now is likely leaving money on the table.
I recently found out one of my in-laws has a chunk of cash in an “interest-bearing” savings account whose current rate is 0.02%. 
We are in the process of moving it to a Vanguard brokerage account, where by default cash will go into a money market fund (VMFXX - current yield 5.26%). For a 10K investment, that’s a difference between $526 and $2 per year.
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Boomer ignorance and/or lack of tech skills are making banks so much money. The worst one for me is schwab not allowing you to use a money market as your core position. It just sits there in some bullshit FDIC sweep account unless you “buy” the money market mutual fund that’s paying 5%+. It’s a joke that they can even do that, whereas Fidelity defaults to a money market fund.
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Vmfxx looks like 1% ish long term? I’m looking to move out of my 5.0 hysa like end of the year when it may go down but I don’t think this is it?
A MMF will be sensitive to interest rates, probably similar to your hysa. It’s not going to stay at 5%+ forever. A reasonable return usually entails some risk and a mmf is about as low-risk as it gets.
But for now, the difference between 5% and 0.02% is so vast it’s just mind boggling that they can get away with it. Even if it eventually reverts back down to 1%, that’s still 50x better than 0.02%.
I know at least one boomer who thinks FDIC (government insurance for bank products) is good but SIPC (non-govt insurance for investments) is some kind of risky scam.
That’s probably after years of near-0% federal interest rates. But yeah there won’t be a huge difference between a HYSA and Vanguard. I recently did the same move Duker is talking about because my HYSA would sometimes wait a little before raising its rates to match Fed increases.
On the subject of savings accounts isn’t it also massively suboptimal to use a HYSA? There are investment products with almost the exact same risk:return profile. The investment will at worst be taxed like HYSA account interest (at marginal tax rates) but more likely taxed as LTCG/qualified dividends. Unless you’re for sure using your money in less than a year it seems like HYSA’s should be avoided entirely. But I don’t see this ever come up as financial advice so am I missing something?
I keep my emergency fund in a HYSA because if there’s an emergency I want to be able to access it immediately. I lose like 80 bps of yield relative to a money market fund and view it as the cost of near instant liquidity.
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If there’s an fdic insured alternative to hysa’s that guarantee 5.0%+ hmu
Yeah, there’s a pretty big difference between “low risk” and “only at risk in the event of the collapse of the US government.” I’m pretty happy to trade a few basis points for liquidity and security, at least for a good chunk of my roll.
Like what? That sounds like what I linked to in the below post, but that was fairly novel and I think there’s still “is this actually legal?” questions around it:
He might be referring to box spreads
FDIC would only be bank stuff like CDs, HYSA and money markets. As far as I know money market mutual funds fall under SIPC which has similar coverage limits.
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Serious question: why not just count on American Express for true emergency cash you would need instantly?
I generally see ‘I can get the cash in under a week’ as fast enough for the emergency fund is all.
Yeah, I feel the same way. I have a whole mess of credit cards that constantly have zero percent balance transfer offers with the ability to have them “balance transfer” money right into my checking account for like a 3 percent fee. That seems fast enough to me to count it as my emergency cash that is not otherwise tied up elsewhere. Although at this point savings account rates are so high that I’ve got a bunch of money there I could easily access as well, but if savings account rates came down I’d have no problem moving the money to something more tied up and relying on a credit card in an emergency.