Money markets at Schwab now above 4%, tax-free muni now above 3%

[Coronita]

Looks like schwabnmoney market swvxx is now above 4%.

Also, it looks like the tax-exempt muni are now above 3%

https://www.schwab.com/money-market-funds

The good news for people that did a 30 year refinance at 3% or below keeps getting better and better…

Living off of interest with mich lower risk might be achievable a lot sooner than I thought.

[The-Shoveler]

We are almost 100% short duration treasuries paying over 4% (some as high as 4.8%) in our IRA’s.

Almost no stocks in any account.

At some point will look to move to long term treasuries.

Sleep much better.

[Coronita]

[quote=The-Shoveler]We are almost 100% short duration treasuries paying over 4% (some as high as 4.8%) in our IRA’s.

Almost no stocks in any account.

At some point will look to move to long term treasuries.

Sleep much better.[/quote]

Good move. My net worth is roughly split 25/25/50 pretax investment, IRA+401k, and real estate.

My pretax accounts have less than 25% stock. The rest is in money market and short term CDs. My retirement accounts have more stock index funds and also dividend paying companies in energy and consumer Staples. I have less than 10% exposure in individual tech stocks right now, though I’m slowly buying some of the big name techs that have been beaten down quite a bit in really small amounts….

If things hold up, my 2022 return hopefully will be around 1%. It sucks but better than the negative return the stock markets did this year… In the previous good years of the stock market, I didn’t get the the huge returns others did… In the bad years like this year, I’m not losing the amount the markets are this year. So, I think I’m somewhere in between , being that part of me is risk adverse.

I’m keeping my eyes on longer term treasuries and CDs.

[plm]

One percent return would be great. Huge loss last year, starting to think diversification might be smart as stocks will not always be better than bonds. Will buy more iBonds now that the calendar turned I suppose.

[Coronita]

So…. It seems like schwab has some CD’s at 5%…
Fidelity has some at 5.1%

[Coronita]

Here’s the one from fidelity. Note, some are callable before maturity… (See column labeled “call protected”)

• This reply was modified 2 years, 2 months ago by Coronita.

[Coronita]

Unrelated. I bet some of you guys are wondering how I posted an image

I could tell you, but I would have to kill ya….

🙂

• This reply was modified 2 years, 2 months ago by Coronita.
• This reply was modified 2 years, 2 months ago by Coronita.

[barnaby33]

The mystery only deepens!

• This reply was modified 2 years, 2 months ago by barnaby33.
• This reply was modified 2 years, 2 months ago by barnaby33.

[gzz]

Is 5% going to be enough to get people to pull money out of the stock market and decrease consumption spending?

I tend to think not.

Inflation expectations are starting to become entrenched. Buy a car and it will probably appreciate more than 5%. And small investors did poorly last year, but memories of easy money remain and I don’t think they will be satisfied with 5% per year with memories of 5% per day runs on meme stocks fresh in their heads.

Perhaps we’ll see interest rate sensitive parts of the economy get hit hard by the Fed again and again, without much effect on most of the economy.

[Coronita]

I have no idea what you mean here. A safe CD is one portion of my entire net worth. Specifically, it’s where I park my emergency cash and my equity that I cashed out refinanced at 3% for 30 years.

It’s not meant to replace long term IRA/401k investments in index funds.

[Coronita]

I should also mention. It’s not just 1 CD. It’s a few of them spread out over different terms + MMA and some treasury funds… Usually you pick a few that matures at varying terms just in case rates keep ratcheting up, like it is now.

[gzz]

I wasn’t speaking about your proclivities but Americans with savings generally.

[Coronita]

What does consumption spending have anything to do with CDs?????

People who binge on consumptive spending in America have virtually no money to be investing or saving. Not following your logic here on why CDs would matter for those class of people

• This reply was modified 2 years, 2 months ago by Coronita.
• This reply was modified 2 years, 2 months ago by Coronita.

[sdrealtor]

Correct. Most people with the capital to invest in this country are professionally advised or well educated. The general public investors he’s referring to don’t exist to any real extent

[plm]

5% is enough for me to put new savings and dividends earned into bonds (13 week and 26 week tbills) instead of stocks. 401k and current brokerage account is still mostly stock and are long term investments which should grow faster than 5 percent so not going to sell.

Most of the cash in the brokerage account is now swvxx. Also moved most of my bank savings account to 13 week tbill ladder so that is just free money. So just taking advantage of the high rates for now. And when rates go down perhaps in a couple of years, it should be good for stocks again.

[Author]

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