Anyone else hoarding cash right now?

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goodenyou
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Re: Anyone else hoarding cash right now?

Post by goodenyou »

My wife and are also fully funding qualified plans and investing in stocks and bond funds per our AA in our plans. This would be the maximum 401(k) with catch-up, Mega Backdoor Roth and Pension and Profit Plans for both of us. This won't be withdrawn for 18 more years. The taxable savings has been in cash and maximum I-Bonds. I finally opened an ALLY savings account. HY savings is a whopping 1%! (and probably going lower).
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JackoC
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Re: Anyone else hoarding cash right now?

Post by JackoC »

fredflinstone wrote: Wed Aug 05, 2020 7:00 am Some people who dislike gold as an investment say:
"If society collapses, your gold will be worthless. It's not like you can eat it."

Other people who dislike gold as an investment say:
"If society collapses, your gold will be stolen. It's not like you can defend it."

As someone else in this Forum pointed our recently, both of these statements cannot be true at the same time. Either gold is going to be so worthless that nobody wants it, or it is going to be so valuable that people will risk their lives stealing it. I suspect the latter.
To be fair, one statement could be true sometimes and the other true other times, so that the expected value of both together subtracted from the expected value of gold. But in general I find those kind of one line dismissals of gold to be lacking imagination. They seem to often be knee jerks against gold bugs, the *people*, and their attitudes and statements, that the speaker finds annoying or offensive, rather than careful thought about the asset itself, gold.

If you look around the world there are a few countries with a very small % of the world's population which are failed states. There are loads of countries that are pretty to highly dysfunctional and difficult places to live, and lack entirely trustworthy currencies and govt debt, but nonetheless basically functional societies. And very few of those are so totalitarian that they can really control whether people hold or trade gold or even seriously try to control that, though it's easier and more common to regulate to the point of near prohibition the holding of foreign financial assets in foreign accounts. The US itself quasi-bans that (it's so tax risky to have overseas accounts it's hard to justify that form of tail risk protection). It doesn't have to be nearly the extreme transition from idealized image of the US to societal collapse for gold to be a good thing to have some of. But if things stay tolerably on track in the US, then gold tends to bounce around quite a lot with apparently zero-ish real expected return (could be well less than zero after run ups like recently, very hard to say). That's the trade off seems to me. 'It wouldn't help you if the country became a lot crappier' is pretty plainly wrong IMO, if you just look around the world.
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ohboy!
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Re: Anyone else hoarding cash right now?

Post by ohboy! »

On a somwhat related note I just completed a Capital One 360 signup bonus. $50k for 90 days paid $500 + their pretty competitive high yield savings rate (1-1.5% over the past 3 months). Figure that's annualized 6 or 7%. Not too bad for pretty low risk. Other similar bank bonuses are out there with similar rates of return. Takes about 10 minutes to setup and 10 minutes to close.
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firebirdparts
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Re: Anyone else hoarding cash right now?

Post by firebirdparts »

MNSooner wrote: Wed Aug 05, 2020 8:47 am Does it seem internally inconsistent to use “hoarding cash” and “hyperinflation” in the same sentence?
I suppose so. The true believers should be hoarding mortgaged assets.
A fool and your money are soon partners
Carguy85
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Re: Anyone else hoarding cash right now?

Post by Carguy85 »

Entertainment/hobbies usually cost something one way or another...I look at doomsday prepping In similar terms. Likewise thinking a superpower is going to rapidly slip into a 3rd world country....hmm entertaining thought I suppose?...btw remember in the movie Titanic where the guy try’s to pay his way into a life boat? Someone above mentioned food/water/firepower...maybe the last could be generalized as force but that’s what it all boils down to worst case senario.
000
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Re: Anyone else hoarding cash right now?

Post by 000 »

Yes. But I am becoming uncomfortable with it. Publicly traded stocks and bonds seem too richly valued. I don't want more Gold. "Everything bubble" comes to mind.
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arcticpineapplecorp.
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Re: Anyone else hoarding cash right now?

Post by arcticpineapplecorp. »

anyone else notice the OP asked this question early this morning but hasn't checked back in to answer my question or responded to the three pages of comments/answers?
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
Mindbender
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Re: Anyone else hoarding cash right now?

Post by Mindbender »

ohboy! wrote: Wed Aug 05, 2020 2:39 pm Usual discussion here. Majority of Bogleheads will put everything at their asset allocation regardless of the environment. A few people want to time the market or hedge with gold or silver and that creates a disagreement. Gold and Silver is part of my asset allocation. So is cash. And 401k, Roth, HSA, etc. And let's just add to this mess of a topic CRYPTO!! Crypto is my best performer this year out of all my assets. Since I have a diversified portfolio I can "rebalance" when things go on sale. Right now equities are not on sale in my mind so I'm holding some cash. Who knows what the future holds, but it's good to hold everything that could be part of it.
This is about the last place I thought I’d see a crypto post. :D
InvestorP
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Re: Anyone else hoarding cash right now?

Post by InvestorP »

StormShadow wrote: Wed Aug 05, 2020 9:06 am Probably because gold has been universally accepted as a valuable commodity across multiple civilizations throughout the planet for thousands of years.
All the investments in gold are through the stockmarket though. The average investor doesn't actually own physical gold. So I'm thinking if society collapses, will those people who "own" gold actually get the phsycial gold? Especially if it's the apocoplyse.

This is a fun thread. :D
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Hector
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Re: Anyone else hoarding cash right now?

Post by Hector »

I am not. I have learned that I do not know how to predict the future. I am sticking to my AA.
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Re: Anyone else hoarding cash right now?

Post by anoop »

KlangFool wrote: Wed Aug 05, 2020 6:48 am I bought some gold and silver.
Physical or paper?
anoop
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Re: Anyone else hoarding cash right now?

Post by anoop »

InvestorP wrote: Wed Aug 05, 2020 11:04 pm
StormShadow wrote: Wed Aug 05, 2020 9:06 am Probably because gold has been universally accepted as a valuable commodity across multiple civilizations throughout the planet for thousands of years.
All the investments in gold are through the stockmarket though. The average investor doesn't actually own physical gold. So I'm thinking if society collapses, will those people who "own" gold actually get the phsycial gold? Especially if it's the apocoplyse.

This is a fun thread. :D
A collapse to that extent is much less probable, but if one is holding physical gold for that scenario, then one must also be a prepper (i.e. guns, ammo, canned food, kerosene stove, backyard garden, etc.).

Paper gold is all about hedging against the dollar losing its purchasing power in a controlled fashion, the way the fed is trying to force it.
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Re: Anyone else hoarding cash right now?

Post by anoop »

JustinR wrote: Wed Aug 05, 2020 6:34 am I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.
I got out of the market in Feb. Of 2008, that is. And never got back in. So it's a tough call. If you believe in the fed put, it says market will keep going up for at least another two years, possibly longer, barring some crisis that they are unable to address or that forces them to raise rates. (I can't think of what such a crisis could be.)
https://youtu.be/dBTfIIm-sgU?t=3401
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JustinR
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Re: Anyone else hoarding cash right now?

Post by JustinR »

arcticpineapplecorp. wrote: Wed Aug 05, 2020 6:48 am can you give some examples? Are you talking about a job loss? What else is there? credit card machines stop working? why else would you need large amounts of cash?
Job loss, market tanking, etc. You don't want to be liquidating your stocks at that point.

If you lose your job, right now isn't the best time to get hired again.

Everything is uncertain and there isn't an end in sight.

Superfunding your emergency fund is what I'm doing. Is it stupid? Maybe, but I'm preparing for the worst, or at least bad, whatever that may be.
acegolfer
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Re: Anyone else hoarding cash right now?

Post by acegolfer »

Yes, but it was unintentional. We were going to purchase Tesla Model Y in fall. So we have been building up bank balance gradually for months instead of taxable. But we put off that purchase for now. Undecided whether to get a Tesla or buy a $15k used and invest the excess.
CycloRista
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Re: Anyone else hoarding cash right now?

Post by CycloRista »

Blueskies123 wrote: Wed Aug 05, 2020 7:58 am Society does not have to collapse for gold to be useful in a portfolio. I am old enough to remember the prime rate at 16%. My first mortgage was at 12% if I recall correctly. High inflation or hyperinflation is probably a more realistic scenario than societal collapse but both could happen, its just not a probable outcome.
I have 3% of my portfolio in gold ETFs. I would not think large gold bars will be useful in a collapse but a few gold coins might. They will not be worth a lot and you will not get change back but they might be worth something.
If I recall, gold was fought over in the dark ages so yes it will have value in a collapse.
I wasn't in the market for a mortgage @15% or more but remember that time quite well...

The S&L crisis was tricky too- I had all of my liquid funds in savings and checking accounts with one of them. For some number of weeks, it was not possible to withdrawal money. Since then, I keep a few months worth of physical cash on hand and have built up 2+ years of readily accessible funds (so, no different "hoarding strategy"). The rest I won't need for 10+ years so it is in the market.

Gold was:
~$2000 in 1980 (today's dollars = ~$2660)
$400 2001
$1900 in 2011
$1200 in 2015
and now around $2000

It isn't quite at the 1980 range but getting there :moneybag

I'm going to sell some (that I inherited) soon. In times of inflation, physical assets and work skills that can be bartered are important- I've got those going for me as well ;)
JackoC
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Re: Anyone else hoarding cash right now?

Post by JackoC »

Carguy85 wrote: Wed Aug 05, 2020 3:29 pm Likewise thinking a superpower is going to rapidly slip into a 3rd world country....hmm entertaining thought I suppose?
Citizens of the Soviet Union thought of their country as a 'superpower'. That was arguably somewhat of an illusion, but really it's a pretty subjective term, as is '3rd world country'. Just speaking generally, not to derail and possibly shut down thread with any specific negative predictions about the US. And society did not 'collapse' in Russia. In fact some Russians probably think their country has now been restored to 'superpower' status, and what would be the point of arguing with them about it? But Russia arguably remains a country where an investor benefits from not relying wholly on the home currency, it certainly has been at times in the post-Soviet era. As are many other countries in the world which have not 'collapsed', all of them populated by human beings, as is the US.
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Re: Anyone else hoarding cash right now?

Post by cusetownusa »

acegolfer wrote: Thu Aug 06, 2020 7:59 am Yes, but it was unintentional. We were going to purchase Tesla Model Y in fall. So we have been building up bank balance gradually for months instead of taxable. But we put off that purchase for now. Undecided whether to get a Tesla or buy a $15k used and invest the excess.
If you end up getting the Model Y you will have to let us know how you like it. My next car will hopefully be an EV and unless better options present themselves at that time, there is a good chance I will get a Model Y.
acegolfer
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Re: Anyone else hoarding cash right now?

Post by acegolfer »

cusetownusa wrote: Thu Aug 06, 2020 9:48 am
acegolfer wrote: Thu Aug 06, 2020 7:59 am Yes, but it was unintentional. We were going to purchase Tesla Model Y in fall. So we have been building up bank balance gradually for months instead of taxable. But we put off that purchase for now. Undecided whether to get a Tesla or buy a $15k used and invest the excess.
If you end up getting the Model Y you will have to let us know how you like it. My next car will hopefully be an EV and unless better options present themselves at that time, there is a good chance I will get a Model Y.
we were going to buy Tesla because of Autopilot. If ICE had the same driverless technology, we wouldn't pay for EV premium. We don't drive much and the gas price is cheap here.
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arcticpineapplecorp.
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Re: Anyone else hoarding cash right now?

Post by arcticpineapplecorp. »

JustinR wrote: Thu Aug 06, 2020 3:53 am
arcticpineapplecorp. wrote: Wed Aug 05, 2020 6:48 am can you give some examples? Are you talking about a job loss? What else is there? credit card machines stop working? why else would you need large amounts of cash?
Job loss, market tanking, etc. You don't want to be liquidating your stocks at that point.

If you lose your job, right now isn't the best time to get hired again.

Everything is uncertain and there isn't an end in sight.

Superfunding your emergency fund is what I'm doing. Is it stupid? Maybe, but I'm preparing for the worst, or at least bad, whatever that may be.
ah, thank you for extrapolating. you see the devil is always in the details. when you leave details out, a question lacks proper context. the answers you get may not satisfy as a result.

that being said, a job loss and a market tanking are two different things, buy you're asking if one should hoard cash to deal with:
1. job loss
2. market tanking

regarding #1, you always want to have "enough" cash on hand for any emergencies. This may include job loss, or your house catches fire and you're temporarily displaced. Perhaps the car breaks and you need a rental. There are a myriad of reasons to have cash on hand. The goal is to get you through the emergency. Regarding job loss, you should have enough til you get back on your feet. Before the Great Recession a decade ago conventional wisdom was to have 3-6 months for this purpose. But as we found out in the Great Recession, many didn't get back to work in 3-6 months. For some it took a year or more. So then you started hearing the "conventional" wisdom say have 6 months to a year in savings for this purpose.

This may be correct for some and wrong for others. It really depends upon the demand for the supply of your labor, right? Because it's a labor market, which means how quickly you get back to work is dependent upon the available supply of what you have to meet the demand. If you're a brain surgeon and the world needs more brain surgeons, you can probably get a job fairly quickly I'd imagine. But if you flip burgers and both a teenager and an out of work executive are willing to flip burgers (along with lots of others), well there aren't enough burger flipping jobs to cover all the demand for those jobs. So it might be harder for you in that circumstance (or take longer to find a job, because of the high competition/demand for scarce supply of jobs).

So if you think it could take longer to get reemployed after job loss, hoard more. If you think you can get reemployed faster, hoard less. There are no quick answers, but these are some of the guidelines. Remember you may get unemployment compensation as well, so you might not need AS MUCH savings as you imagine, because your UC would cover some of your spending. And that brings me to that point:

In addition to hoarding cash, if you can reduce expenses, that's working the problem from the other end. If you have lower expenses, you need less income to cover your lifestyle. If you need less money because you spend less, you need less cash to hoard (or the cash you have will last longer). So focus on skills building (to be in demand of a limited supply) and reduce expenses. These are the things you can control. You can't do anything about which you can't control.

regarding #2 you are asking if you should hoard cash because the market tanking but you say "You don't want to be liquidating your stocks at that point". That's correct. You'd want to be buying, rather than selling. But are you saying you want cash on hand to buy at lower/depressed prices or you're worried about not cashing stocks after they fell because you need money??

Depending upon how you're looking at this, you could just be talking market timing, as in, I want cash to buy stocks on sale. Problem with that is you could be waiting on the sidelines while the market goes up and your cash isn't making money and could have been. there's many many many posts about market timing on this site and at the wiki, so i encourage you to read up on why you shouldn't do that.

Uncertainty exists all the time. Nothing has changed that. Also understand risk and uncertainty are not the same things. There was an interesting podcast I heard the other day on econtalk about this about Radical Uncertainty (source: https://www.econtalk.org/john-kay-and-m ... certainty/). You actually wouldn't want to live with out uncertainty. If everything was certain, life'd be incredibly boring.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Monster99
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Re: Anyone else hoarding cash right now?

Post by Monster99 »

fredflinstone wrote: Wed Aug 05, 2020 7:00 am
egrets wrote: Wed Aug 05, 2020 6:51 am
KlangFool wrote: Wed Aug 05, 2020 6:48 am I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool
I never understand why people think gold is valuable if society collapses. It's not like you can eat it.
Some people who dislike gold as an investment say:
"If society collapses, your gold will be worthless. It's not like you can eat it."

Other people who dislike gold as an investment say:
"If society collapses, your gold will be stolen. It's not like you can defend it."

As someone else in this Forum pointed our recently, both of these statements cannot be true at the same time. Either gold is going to be so worthless that nobody wants it, or it is going to be so valuable that people will risk their lives stealing it. I suspect the latter.
If society truly collapses, the best commodities will be the 3 B's - bread, bottled water and bullets.....
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Re: Anyone else hoarding cash right now?

Post by Robot Monster »

Monster99 wrote: Thu Aug 06, 2020 10:18 am
fredflinstone wrote: Wed Aug 05, 2020 7:00 am
egrets wrote: Wed Aug 05, 2020 6:51 am
KlangFool wrote: Wed Aug 05, 2020 6:48 am I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool
I never understand why people think gold is valuable if society collapses. It's not like you can eat it.
Some people who dislike gold as an investment say:
"If society collapses, your gold will be worthless. It's not like you can eat it."

Other people who dislike gold as an investment say:
"If society collapses, your gold will be stolen. It's not like you can defend it."

As someone else in this Forum pointed our recently, both of these statements cannot be true at the same time. Either gold is going to be so worthless that nobody wants it, or it is going to be so valuable that people will risk their lives stealing it. I suspect the latter.
If society truly collapses, the best commodities will be the 3 B's - bread, bottled water and bullets.....
Don't forget the shopping cart. Please read The Road by Cormac McCarthy for details.
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matti
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Re: Anyone else hoarding cash right now?

Post by matti »

After the crash in March, I realized that I wanted a larger emergency fund. Now that it's built up to a level that I'm more comfortable with, I have increased the amount I invest in the market. I don't know that this is "hoarding" cash, however?
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bligh
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Re: Anyone else hoarding cash right now?

Post by bligh »

I wouldn't describe myself as "hoarding cash" but I do admit that the cash portion of my portfolio has increased substantially since march.

There are three reasons for this:
1 - I decided to double my cash reserves from 1 year of expenses to 2 years. This was done with new contributions.

2 - I had a house down payment fund that was invested 50% in VT. I watched my balance go down even as the likelihood of getting a good deal on a new house went up. I decided this money had no business being invested in stocks anyway, and having kept as much as half of it in stocks when I needed it so soon was a mistake. I had been greedy and instead should have stuck to well established Boglehead wisdom "money you will need in the next 2-5 years had no business being invested in stocks". This was a one time corrective action where I sold the stock to go 100% fixed income on that fund.

3 - I feel no desire to buy more bonds with the yields the way they are now. A savings account is offering a much higher yield.. 10 year treasury pays you 0.55% yield, whereas a decent high yield savings account pays you 0.80%.

I am also very confused by the stock market and the way it has been rising. However, I don't profess to know what the hell is going on, or what is going to happen next, so I plan to continue to add to my stock and bond holdings in my retirement accounts just as before.
softmax
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Re: Anyone else hoarding cash right now?

Post by softmax »

Not really hoarding but I hold enough cash as a house down payment fund.
I invest the rest in VOO/VTI equivalents but I'm doing DCA.
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Re: Anyone else hoarding cash right now?

Post by 7eight9 »

bligh wrote: Thu Aug 06, 2020 11:13 am I wouldn't describe myself as "hoarding cash" but I do admit that the cash portion of my portfolio has increased substantially since march.

There are three reasons for this:
1 - I decided to double my cash reserves from 1 year of expenses to 2 years. This was done with new contributions.

2 - I had a house down payment fund that was invested 50% in VT. I watched my balance go down even as the likelihood of getting a good deal on a new house went up. I decided this money had no business being invested in stocks anyway, and having kept as much as half of it in stocks when I needed it so soon was a mistake. I had been greedy and instead should have stuck to well established Boglehead wisdom "money you will need in the next 2-5 years had no business being invested in stocks". This was a one time corrective action where I sold the stock to go 100% fixed income on that fund.

3 - I feel no desire to buy more bonds with the yields the way they are now. A savings account is offering a much higher yield.. 10 year treasury pays you 0.55% yield, whereas a decent high yield savings account pays you 0.80%.

I am also very confused by the stock market and the way it has been rising. However, I don't profess to know what the hell is going on, or what is going to happen next, so I plan to continue to add to my stock and bond holdings in my retirement accounts just as before.
In lieu of bonds one might want to consider multi-year guaranteed annuities (MYGAs).

Example --- Fixed Annuity Rates for August 2020 ---https://www.blueprintincome.com/fixed-annuities

Rates per above link.

Two year rates as high as 2.30%.

Five and ten year rates as high as 3.45% and 3.60% respectively.
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Re: Anyone else hoarding cash right now?

Post by GlacierRunner »

We changed nothing, but that wasn't entirely the plan. Last month we finished a saving goal for a home maintenance project, and I checked in with my spouse to decide together where the budgeted money that was going to that project would go next. There had been a previous discussion that some or all should go to taxable investing. I have another home improvement project on my mind and we opted to save for that instead of investing those funds. So continuing a cash savings goal while still investing more than 30% of take home in our taxable account.
texasfight
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Re: Anyone else hoarding cash right now?

Post by texasfight »

Buy XLF and hedge with LTPZ vs. holding cash.

50-80% upside in XLF 1 year out.

There is a reason Buffett is buying Bank of America. He buys stuff when it is very difficult to lose money in the longer term and when returns are heavily skewed to the positive side.
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sperry8
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Re: Anyone else hoarding cash right now?

Post by sperry8 »

KlangFool wrote: Wed Aug 05, 2020 7:11 am Hoping to be lucky is not a good strategy. Be prepared for a full range of possibilities is a good thing. Diversification is a good thing.

If you are worried enough to hold more cash, you should stock up some food, water, silver, and gold.

KlangFool
And then, by your logic, bitcoin as well.
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finite_difference
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Re: Anyone else hoarding cash right now?

Post by finite_difference »

Monster99 wrote: Thu Aug 06, 2020 10:18 am
fredflinstone wrote: Wed Aug 05, 2020 7:00 am
egrets wrote: Wed Aug 05, 2020 6:51 am
KlangFool wrote: Wed Aug 05, 2020 6:48 am I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool
I never understand why people think gold is valuable if society collapses. It's not like you can eat it.
Some people who dislike gold as an investment say:
"If society collapses, your gold will be worthless. It's not like you can eat it."

Other people who dislike gold as an investment say:
"If society collapses, your gold will be stolen. It's not like you can defend it."

As someone else in this Forum pointed our recently, both of these statements cannot be true at the same time. Either gold is going to be so worthless that nobody wants it, or it is going to be so valuable that people will risk their lives stealing it. I suspect the latter.
If society truly collapses, the best commodities will be the 3 B's - bread, bottled water and bullets.....
Wouldn’t that be ABC? Ammo, Bottled water, Canned goods? Bread will go bad fast unless you’re referring to sourdough starter.

And don’t forget Chapstick and Sunscreen. Come to think of it, unless you build a fully stocked armored bunker you’ll want to start sharpening those survival skills.
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Chrono Triggered
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Re: Anyone else hoarding cash right now?

Post by Chrono Triggered »

Hoarding an asset that pays me virtually nothing? Why on earth would I do such a thing? I try to keep as little cash as possible on me at all times.
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goodenyou
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Re: Anyone else hoarding cash right now?

Post by goodenyou »

Chrono Triggered wrote: Thu Aug 06, 2020 1:30 pm Hoarding an asset that pays me virtually nothing? Why on earth would I do such a thing? I try to keep as little cash as possible on me at all times.
Most investors that accumulate cash are not concerned with opportunity cost. They are concerned with preserving as much capital in the short term as possible. Long term cash is not a good investment due to erosion of purchasing power from inflation. Long term it may be a good but expensive tranquilizer.
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Re: Anyone else hoarding cash right now?

Post by mickeyd »

rascott wrote: Wed Aug 05, 2020 12:35 pm Cash is trash.
Catchy. I prefer "Cash is King".
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Van
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Re: Anyone else hoarding cash right now?

Post by Van »

fsrph wrote: Wed Aug 05, 2020 9:07 am If you consider staggered CD as cash, then yes I have been significantly adding to these holdings. I considered this decision due to a special circumstance. I was exceptionally fortunate to purchase 3,4 and 5 year CD's (at 3-3.25%) that have an unlimited add on feature, so why not?

Francis
Is the "unlimited add on feature" unusual? I am not familiar with that, although I've purchased quite a few CDs over the years. Does that mean you can keep buying 5 year CDs at 3.25% for as long as you want?
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StormShadow
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Re: Anyone else hoarding cash right now?

Post by StormShadow »

InvestorP wrote: Wed Aug 05, 2020 11:04 pm
StormShadow wrote: Wed Aug 05, 2020 9:06 am Probably because gold has been universally accepted as a valuable commodity across multiple civilizations throughout the planet for thousands of years.
All the investments in gold are through the stockmarket though. The average investor doesn't actually own physical gold. So I'm thinking if society collapses, will those people who "own" gold actually get the phsycial gold? Especially if it's the apocoplyse.

This is a fun thread. :D
What are you talking about?

DW carries gold in her right upper molar. It is a small but significant percentage of our portfolio. Also helps her chew.

I'm betting it'll be able to purchase a cup of coffee even 20-30 years from now.
Monsterflockster
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Re: Anyone else hoarding cash right now?

Post by Monsterflockster »

fredflinstone wrote: Wed Aug 05, 2020 7:00 am
egrets wrote: Wed Aug 05, 2020 6:51 am
KlangFool wrote: Wed Aug 05, 2020 6:48 am I have 2 years of expenses in cash. I bought some gold and silver. I would invest the rest until I reach my number. Then, I may buy more gold and silver.

KlangFool
I never understand why people think gold is valuable if society collapses. It's not like you can eat it.
Some people who dislike gold as an investment say:
"If society collapses, your gold will be worthless. It's not like you can eat it."

Other people who dislike gold as an investment say:
"If society collapses, your gold will be stolen. It's not like you can defend it."

As someone else in this Forum pointed our recently, both of these statements cannot be true at the same time. Either gold is going to be so worthless that nobody wants it, or it is going to be so valuable that people will risk their lives stealing it. I suspect the latter.
Well if society collapses “cash” is nothing more than a piece of paper and your net worth a number in a computer. Those aren’t very comforting either.
rockthisworld
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Re: Anyone else hoarding cash right now?

Post by rockthisworld »

JustinR wrote: Wed Aug 05, 2020 6:34 am I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I cashed out half of my portfolio in July. I just saw a lot in the data if you look at high unemployment, benefits running out Jul 31st maybe reinstated soon with less benefits which hurt consumers. And either way we are adding debt at a massive level. Money is debt. I’m holding cash and either going to deploy it into SP500 if it starts to crash (20-30%) start to DCA or gold pulls back to the $1800 resistance or housing market comes down about 15-20% or a combination of the three. I’m not sure what the future holds but I’m waiting for value.
Sconie
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Re: Anyone else hoarding cash right now?

Post by Sconie »

mak1277 wrote: Wed Aug 05, 2020 8:43 am
Yes, I definitely think gold/silver would be a more useful asset than currency in the event of societal collapse. Diamonds also, probably. But nothing would be as valuable as bullets.
How about medicines, including penicillin and other broad-spectrum antibiotics? How about gasoline, diesel and other fuels for electrical generators?

Bullets? I bet you mean loaded ammunition, not just the projectile portion of the complete cartridge.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan
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White Coat Investor
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Re: Anyone else hoarding cash right now?

Post by White Coat Investor »

JustinR wrote: Wed Aug 05, 2020 6:34 am I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I remain fully invested. But that still means there is a lot of cash sitting around for various short term purposes and cash flow needs. I'm not going to invest next month's tax payment.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Robot Monster
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Re: Anyone else hoarding cash right now?

Post by Robot Monster »

White Coat Investor wrote: Sat Aug 08, 2020 12:30 pm
JustinR wrote: Wed Aug 05, 2020 6:34 am I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I remain fully invested. But that still means there is a lot of cash sitting around for various short term purposes and cash flow needs. I'm not going to invest next month's tax payment.
I invest all my cash in junk-bonds while my kids cry at the kitchen table for food to eat.
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Lee_WSP
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Re: Anyone else hoarding cash right now?

Post by Lee_WSP »

JustinR wrote: Wed Aug 05, 2020 6:34 am Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I realized that my emergency fund was too small so I increased it. But now that I've hit the limit, I can't keep any extra cash in an account yielding a paltry 0.5% yield. The Fed has declared that there is no alternative.
mindboggling
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Re: Anyone else hoarding cash right now?

Post by mindboggling »

I'm retired, but most months I have extra money to invest. I've been putting 50% into a high-yield savings account at an online bank. The other half I add to VEU (Vanguard Developed Market ETF) since my international equity allocation is on the low side (slightly less than 20% of total equity).

I don't know what else to do...
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wander
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Re: Anyone else hoarding cash right now?

Post by wander »

We have enough cash for 1 month expenses.
WildCat48
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Re: Anyone else hoarding cash right now?

Post by WildCat48 »

We are sitting on just under $5M in cash which is a bit more than usual for us.
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goodenyou
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Re: Anyone else hoarding cash right now?

Post by goodenyou »

StormShadow wrote: Sat Aug 08, 2020 10:58 am
InvestorP wrote: Wed Aug 05, 2020 11:04 pm
StormShadow wrote: Wed Aug 05, 2020 9:06 am Probably because gold has been universally accepted as a valuable commodity across multiple civilizations throughout the planet for thousands of years.
All the investments in gold are through the stockmarket though. The average investor doesn't actually own physical gold. So I'm thinking if society collapses, will those people who "own" gold actually get the phsycial gold? Especially if it's the apocoplyse.

This is a fun thread. :D
What are you talking about?

DW carries gold in her right upper molar. It is a small but significant percentage of our portfolio. Also helps her chew.

I'm betting it'll be able to purchase a cup of coffee even 20-30 years from now.
Not at Starbucks. That will cost an arm, leg and a gold molar.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.
tiburblium
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Re: Anyone else hoarding cash right now?

Post by tiburblium »

JustinR wrote: Wed Aug 05, 2020 6:34 am I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
Not a chance, I am more bullish now on stocks than I was last year.
andypanda
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Re: Anyone else hoarding cash right now?

Post by andypanda »

"Hoarding an asset that pays me virtually nothing? Why on earth would I do such a thing?"

I don't know. Because you have too much stuff already?

For me/us, it's because we seem to have enough or even too much of most things - pensions, SSA retirement, lots of stocks and funds with decades of capital gains, some bonds, one house, canned goods, cars/trucks, junk silver, a little gold, guns & ammo (some as old as the 1963 Marlin Mountie .22 my uncle gave me for my birthday :) and my father's favorite Python and Italian 28 ga. O/U), fishing gear & a boat, and a shallow 20-foot well that has never run dry in 25 years. I sold my former home in April, paid off her house in May, and then banked the rest in cash and CDs and multiple checking accounts that we already had. I'd owned the house since 1980. And I will need to start taking RMDs in a year or two. She is 5 years younger.

Jeez, I'm retired have too much stuff. ;)
guyinlaw
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Re: Anyone else hoarding cash right now?

Post by guyinlaw »

Greed index is at 72 heading higher, Put Call ratio is at close to the low for the year. Majority of traders are super bullish.

Image
https://money.cnn.com/data/fear-and-greed/

Yes, there are many reasons why markets can go lower - schools opening, COVID spreading, pre and post-election issues, China etc..

Reasons for being bullish..
1. Do remember that Fed is watching our back! They will step in if stocks drop + they will keep pushing down 10Y and LT rates lower.
2. Nowhere else for all the money to go other than stocks.
3. Lot of money still in sidelines.

Listen to Rick Ferri on the WCI podcast recently. I am paraphrasing -"The retirement funds that need to return 6%, where can the invest? They will have to increase allocation to stocks." https://www.youtube.com/watch?v=2JS6rmlDmas
Time is your friend; impulse is your enemy. - John C. Bogle
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btq96r
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Re: Anyone else hoarding cash right now?

Post by btq96r »

JustinR wrote: Wed Aug 05, 2020 6:34 am I stopped investing in my taxable back in March and can't bring myself to start again. I'm still investing automatically in my 401k.

I'm just holding onto my cash in case of a worst case scenario if society collapses and I need liquid funds. I don't mean the case where you'd have to live in a bunker and have guns/ammo. There are smaller degrees of societal collapse than that.

So far it seems like it won't be the case, but who knows? There's no end in sight.


Edit: By cash, I mean in a bank account. Like overfunding your emergency fund, as opposed to investing.
I wouldn't say I'm hording cash, but I did make sure my emergency fund was fully loaded instead of letting it hover within an acceptable range. I've been through a three month salary reduction (thankfully over for now), there's always the risk from the pandemic of a large medical bill, my division of the company being put up for sale, and a vehicle that could crack where now it creeks..it was just prudent for me to have that safety net. But I'm also continuing to invest excess cash after monthly expenses since I've got a tight emergency fund in place.
michaeljc70
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Re: Anyone else hoarding cash right now?

Post by michaeljc70 »

No. I'll give you your own answer (from the "Why do people still try to time the market?" topic):
JustinR wrote: Sat Feb 29, 2020 5:36 am
TheTimeLord wrote: Thu Feb 27, 2020 8:45 pm
JustinR wrote: Thu Feb 27, 2020 8:10 pm Humans are dumb and investors are human.
What leads you to that conclusion?
Uh because humans constantly believe they can outsmart randomness?

Even when the randomness odds are expressly stacked against them they still think they can beat it (casinos).
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