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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • CD Rates Going Forward
    dt: I bought a 12 month 5% CD yesterday. I know that I could have gotten a higher rate with a brokered CD, but wanted to stay with my credit union. As you know, I have always tried to keep it simple for my wife's sake. Now, I have come to the point that I need to keep it real simple for myself. I realize my thinking is slowing. There may be a whole new strategy sometime in the near future.</
    >
    hondo, sounds good to me. I can get Money Markets over 5% for now, but I can live with 5+% CDs as long as they are available. I am willing to go longer term than 1 year in my IRA account, but in my taxable account I prefer to stay more liquid with shorter term offerings. I think I could go back to investing in bond oefs, but it feels good to be able to talk to my wife about CDs, and she shows interest and actually offers opinions on terms and rates. Right now, I am just happy to have CDs to make some money, and it certainly is a lot less stress and worry for me.
    dtconroe in Fund Discussions
  • Munger on "diworsification." (link.)
    “Well, how much cash in Munger holding these days, and how is his portfolio doing?”
    Berkshire remains heavy on cash. Best recollection is north of 20%. Around 40% of their equity stake is in AAPL (+54% YTD).
    Berkshire lost a bit in 2022, but has done very well this year. Better than 10% YTD.
    To each his own. If diversification is the refuge of cowards, I’m guilty as charged. It’s harder to muck things up ISTM if widely diversified. No single stupid move is going to screw things up too badly.
    hank in Other Investing
  • Fitch Downgrades US from AAA to AA+
    I’m befuddled as to where the markets are heading (I mean more so than usual). Took a bit of risk off the table this week. I don’t think the downgrade in credit rating was a big reason for today’s turbulence. Maybe a good excuse to unload some overextended sectors. Everybody & his brother know the S&P, dominated by big tech, is overbought.
    Under ”woulda, coulda, shoulda”, a consumer staples (food) stock I gave up on / sold 2 weeks ago jumped nicely today. Bad timing - again. Looks like consumers staples in general did well today. I’m amazed how well BRK.B continues to hold up. If you look at the historical charts, it has experienced at least 1 steep drawdown. (Don’t own.) Some magic Buffet / Munger potion I guess. And PRWCX has held up better this week than I would have expected (but off .59% today).
    Intermediate and long term bonds at over 4% worth looking at. Will do well in a recession. But probably losers out very long term. Enjoying everybody’s thoughts.
    hank in Other Investing
  • Fitch Downgrades US from AAA to AA+
    Try this yourself.
    Check your credit score.
    Go apply for a bunch of credit (credit cards, student loans, HELOC,etc.)
    Max out all of these cards
    Apply for more Credit
    Max that out
    You discuss your credit related debt with your wife… she says, “raise your debt ceiling”
    You divorced your wife on grounds of insanity
    Your net worth is cut in half
    Your 2.5 kids move back in with you
    Your Ex-wife never moves out because it's too expensive for her to buy or rent
    She starts dating your financial advisor
    He now collects more than 1% for his services
    You lose your job
    You check your credit…oops, you have been downgraded.
    Highlights:
    It’s important to recognize how your financial behaviors may impact your credit scores
    There are several factors that are used to calculate credit scores
    There are many different credit scoring models, or ways of calculating credit scores
    Makes sense to me why US Credit score just dropped!
    https://equifax.com/personal/education/credit/score/how-do-your-actions-affect-your-credit-scores/
    bee bee in Other Investing
  • MARKETPLACE- Let's do the numbers on CEO pay

    “Boss makes a dollar, I make a dime” Try a quarter of a cent, these days. Let’s do the numbers on CEO salaries and how they compare to those of employees.
    As workers in many industries fight for higher wages, CEO pay has climbed to record highs.
    Compensation for chief executive officers rose a staggering 1,460% between 1978 and 2021, according to a 2022 report from the left-leaning Economic Policy Institute.
    Among the 350 publicly owned U.S. firms with the largest revenue, CEOs in 2021 made an average of $27.8 million, which includes stock grants and options. The ratio of CEO pay to that of the typical worker stands at 399 to 1. In 1965, the ratio was 20 to 1.
    CEO pay has risen exponentially as more of their compensation comes in stock, not cash. Meanwhile, workers’ wages have lagged over the past few decades, failing to keep pace with productivity. The Pew Research Center noted there are a variety of potential reasons for slow wage growth, including the decline of unions, noncompete clauses that prevent workers from getting higher salaries; and jobs shifting from manufacturing and production to low-wage industries.
    This gap may be one factor driving the current upsurge in labor activism. Workers in numerous industries are considering going on strike, already on strike or forming unions to fight for better working conditions, higher wages and in some cases the very future of their profession as artificial intelligence threatens to undercut their roles.
    We examined Securities and Exchange Commission filings for publicly traded companies in the middle of this unrest — Disney, UPS, United Airlines and others — and tabulated the pay for their chief executives and median-compensated employees. Check out all the numbers here.
    Janet Nguyen reported this story from Los Angeles.
    ☞ MARKETPLACE, 7/2/23
    Old_Joe Old_Joe in Other Investing
  • CD Rates Going Forward
    dt: I bought a 12 month 5% CD yesterday. I know that I could have gotten a higher rate with a brokered CD, but wanted to stay with my credit union. As you know, I have always tried to keep it simple for my wife's sake. Now, I have come to the point that I need to keep it real simple for myself. I realize my thinking is slowing. There may be a whole new strategy sometime in the near future.
    hondo in Fund Discussions
  • CD Rates Going Forward
    @larryB, that was my suggestion or, at least I threw out the idea. There is nothing wrong with 5.5% on a CD for the next 5 years. If it's called, oh well. Those conditions, falling rates, that make a bank call on that CD should open up other opportunities, like bond funds.
    MikeM MikeM in Fund Discussions
  • CD Rates Going Forward
    @dt. Does Swvxx have more than one share class? My position seems to be yielding 5.09%.
    SWVXX is one of the share classes for their Prime Money Market Fund--I checked again a few minutes ago and SWVXX is now paying 5.12%. I corrected an earlier post which should have stated 5.09%, but is now up to 5.12%. The other share class of the Prime Money Market fund is SNAXX--now paying 5.27%
    dtconroe in Fund Discussions
  • Anybody use any hedging or shorting?
    @BenWP
    Maybe I have gotten it wrong, but I think they can earn enough on treasuries( 5%) to make up the money required for all the options they use. So even if all options expire worthless, they are still made whole.
    sma3 in Other Investing
  • Fidelity Money Market Funds
    @wxman123
    With a little hunting you can find the % of any fund that comes from Treasuries , or from some funds just assume 100%. It would be worthwhile checking to see how much of treasury MM are repos, as repos are not state tax free.
    Turbo tax will prompt you to indicate what % of the income is government and then automatically excludes that from your state tax
    It takes a little work, but it depends on what you think your time is worth.
    When I was working for a living, I usually ignore the $50 in state bond income but now I am retired, I have time to check it carefully and keep every dollar of income I am entitled to
    sma3 in Other Investing
  • emerging market debt vs HY vs leveraged loans
    This is a very good discussion of the risks of each.
    https://active.williamblair.com/emerging-markets-debt/marcelo-assalin/defaults-duration-dollar-the-big-3-in-emd/?id_mc=99133980&et_rid=00Q0z00001b7V5AEAU&et_sid=1802616
    sma3 in Other Investing
  • CD Rates Going Forward
    "Schwab pays the same meager 0.45% whether you hold your cash this way or elect to sweep the money into Schwab Bank."
    @msf, MikeM, and others- Thanks to all for your info. This is what I suspected- that if you want decent interest on your cash at Schwab you have to manually transfer the money to a mmkt fund. I do have a fund there (SWKXX) that I use to hold cash, but it's a Municipal mmkt fund.
    The problem with Schwab's mmkt funds is that you can't instantly transfer money from them to buy some other security- you have to sell the mmkt fund, then wait for that to show up in the "brokerage account" before you can redeploy it.
    Old_Joe Old_Joe in Fund Discussions
  • CD Rates Going Forward
    @dt. Does Swvxx have more than one share class? My position seems to be yielding 5.09%.
    larryB in Fund Discussions
  • Fitch Downgrades US from AAA to AA+
    Think it was premature to say that US may not enter a mild recession, i.e. soft landing. It is a question of when and how severe the recession will be. Many conflicting data right now with the tight labor market, low unemployment rate, falling CPI, slowing service cost and an inverted yield curve. So take you wild guess…
    Agree. Most younger investors probably don’t really know what a recession is. Have to go back to 2008. ISTM everything’s been going up since March 2009. OK - not the case for China, Russia and EM economies. Scary dip in early 2020 - but I wouldn’t call it a recession. The Fed raced to the rescue, even back-stopping some corporate bonds. Lowered interest rates. Printed money. And under 2 different Administrations “rebate” / “stimulus” checks were mailed out to taxpayers. Furniture stores couldn’t keep up with demand. Ships were backed up in ports waiting to unload. Crazy.
    Yes, nasty market sell off last year. Interest rates rose rapidly. Some sold equities out of fear of recession and moved to cash, etc. But the economy continued to run hot.
    I don’t know if there will be a recession this year or not. But I suspect we’re in for a really nasty one one of these days. ‘23? ‘24? ‘25?
    hank in Other Investing
  • CD Rates Going Forward
    When interest on a CD is paid, or a CD matures, they automatically transfer that money to what my statement just shows as "Brokerage", which I suspect pays very little interest.
    Brokerages typically offer to hold your "free credit balance" (cash) as a general obligation of the brokerage (SIPC insured up to $250K).
    For example, at Fidelity this account is called Fidelity Cash (FCASH), currently paying 2.69%. At Schwab, this is called the Schwab One® Interest Feature, currently paying 0.45%.
    Such cash balances may appear on brokerage statements as "Brokerage".
    Schwab pays the same meager 0.45% whether you hold your cash this way or elect to sweep the money into Schwab Bank. At Fidelity, you can elect to sweep cash into a MMF currently yielding 4.94% instead of FCASH's 2.69%.
    https://www.fidelity.com/mutual-funds/fidelity-funds/money-market-funds-fcash
    msf in Fund Discussions
  • CD Rates Going Forward
    @MikeM- You mentioned "I moved the $ to the Schwab MM"... Could you advise which particular MM? I know this sounds stupid, but I've never been sure about their moneymarket accounts. When interest on a CD is paid, or a CD matures, they automatically transfer that money to what my statement just shows as "Brokerage", which I suspect pays very little interest.
    Do you manually transfer such money to another specific MM account?
    Thanks- OJ
    I wasquoting the Schwab "Prime" Money Market Funds--SWVXX and SNAXX. They are the same funds, but different classes and minimums. SWVXX is currently paying 5.12% and SNAXX pays 5.27%. SNAXX does require $1Mil to open an account, which I did in March of 2022 in my IRA, but I lowered that amount significantly later, when I started investing in CDs MM withdrawals, but still can deposit and withdraw money from SNAXX even though the balance is now just 5 figures.
    dtconroe in Fund Discussions
  • Munger on "diworsification." (link.)
    https://finance.yahoo.com/news/charlie-munger-asks-want-more-151617368.html
    Crash Crash in Other Investing
  • CD Rates Going Forward
    Regarding CD early redemption penalties - Is each unique (make sure you read the fine print)?
    Regarding 5 year CDs - Seems like a long time to wait and if you need access to that CD (cash), I would be sure I understood the early redemption penalty?
    bee bee in Fund Discussions
  • Wildermuth Fund to be liquidated
    Wilson on 7-31-2023(link) "Morgan Stanley’s Wilson Says Stock Rally Reminds Him of 2019"
    FD: Wilson is trying to save face. The rally already happened while Wilson was a bear.
    Wait, if Wilson is saying now that the rally will keep going, that's a good time to lighten up on stocks.
    BTW, Wilson's predictions for 2019 were hugely off.
    Dec 31 2018: Wilson 2019 predictions(link): S&P 500 (^GSPC) Michael Wilson, Morgan Stanley’s chief equity strategist, thinks stocks will continue struggling next year. Essentially going sideways. Reality: SP500 was up 31.5%.
    FD1000 in Fund Discussions
  • CD Rates Going Forward
    Make sure the CD rates quoted are non- callable. For now I don’t see 5.5% non-callable CDs at Fidelity.
    Sven in Fund Discussions