# Just Got A Notice From Ally Bank.



## fmdog44 (Jul 10, 2020)

Their interest on savings accts. just went from 1.10% to 1.0%. That being the case long term holds on stocks might be wiser even with a big turn down in the markets. Even over a short stretch of say, five years of large cap dividend paying stocks or an S&P index fund may be better than 1.0%.


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## peramangkelder (Jul 10, 2020)

The interest rate in Australia is  too


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## hellomimi (Jul 10, 2020)

Alliant went down to 0.90% APY, I'll check Marcus GS rates.


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## mathjak107 (Jul 10, 2020)

Stocks are never a proxy for fixed income


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## Pecos (Jul 10, 2020)

My credit union CD went from 3.2% down to 1.04%. I only let half of it "roll over" for twelve months while I look for a better place to stash my short term money. Unfortunately, I am not finding anything better and will probably buy I-Bonds for my wife and I, on the assumption that inflation may come into play quicker than people think.


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## Don M. (Jul 10, 2020)

"Money in the bank" has earned little interest in the past few years.  Much of the blame can be placed on our nations increasing National Debt.  Even at these extremely low Fed Funds Rates, the government still has to pay well over 400 billion a year to cover the interest on the bonds, etc.  If the Fed allowed rates to go up to 4 or 5%, like they were a few years ago, most of the federal budget would be going to bond holders, and if the rates ever hit 20% again, like they did back in the early 1980's, the US government would have to declare bankruptcy.


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## fmdog44 (Jul 10, 2020)

mathjak107 said:


> Stocks are never a proxy for fixed income


It is not an income when you are losing money. Wake up.


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## Aunt Bea (Jul 11, 2020)

I suppose that it depends on why you choose to hold cash in the first place.

If you have a legitimate reason to hold cash for an emergency fund, daily living expenses, or planned purchases, don't be tempted to start chasing higher yields in stocks.

When we start chasing higher yields we can become blind to the higher market risk and volatility.

Keep your powder dry!


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## mathjak107 (Jul 11, 2020)

Aunt Bea said:


> I suppose that it depends on why you choose to hold cash in the first place.
> 
> If you have a legitimate reason to hold cash for an emergency fund, daily living expenses, or planned purchases, don't be tempted to start chasing higher yields in stocks.
> 
> ...


smart investors know never take money you want as cash and  put it in equities ....  even at zero the cash is still cash .... what do you think will happen to that cash position when you wake up to find us down 2-3,000 points and it is in equities .

just look at PPL  down 28% ytd .including all dividends or at&t including dividends down 19% ytd

the cash  i hold is in t-bills or t-bill etf's ...  even at zero it has a role to play .

it acts as the other side of the barbel with long term treasuries ( up 30% over the 1 yr )  to reduce duration .

it also serves as a stock option to buy assets at lower prices but with no expiration date when i rebalance

it serves as an emergency fund


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## rgp (Jul 11, 2020)

Don M. said:


> "Money in the bank" has earned little interest in the past few years.  Much of the blame can be placed on our nations increasing National Debt.  Even at these extremely low Fed Funds Rates, the government still has to pay well over 400 billion a year to cover the interest on the bonds, etc.  If the Fed allowed rates to go up to 4 or 5%, like they were a few years ago, most of the federal budget would be going to bond holders, and if the rates ever hit 20% again, like they did back in the early 1980's, the US government would have to declare bankruptcy.




     ""Money in the bank" has earned little interest in the past few years. Much of the blame can be placed on our nations increasing National Debt. "

 Much of the blame is also due to the low interest loans that are available to the borrowers.  If the banks have much lower interest coming in, they of course have less to pay out. These low interest / no interest loans need to go.

I've been considering a coffee can .....


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## mathjak107 (Jul 11, 2020)

rgp said:


> ""Money in the bank" has earned little interest in the past few years. Much of the blame can be placed on our nations increasing National Debt. "
> 
> Much of the blame is also due to the low interest loans that are available to the borrowers.  If the banks have much lower interest coming in, they of course have less to pay out. These low interest / no interest loans need to go.
> 
> I've been considering a coffee can .....


however if instead you bought treasuries instead they are soaring ...the long treasury bond has returned 30% in gains over the last year.

my fixed income runs half  t-bills and 1/2 long term treasuries ...a 50/50 mix   of t-bills and long term treasuries returned 15%  when combined over the last year..... they beat equities .


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