Is your lazy cash working for you, or is it sitting on your couch? Because taking action and beating inertia is no easy task. In a recent report, we learned that many investors rolling over their 401(k)s to IRAs didn’t realize the initial balance was held in cash. That’s not a terrible place to be with money markets at 5%, but it’s getting more costly as rates come down. And they think they’re still invested in the markets.
Does someone you know not realize they’re in cash and not invested as they thought they were?
Where will cash returns go now? How far will rates fall? Clearly, the Fed’s navigating in the fog and should be guided by a gold standard. That way, you and I would know how many inches are in a foot. Clearly, they’re using some other measurement.
You may wonder what kind of message this sends to the kids playing in the stock market sandbox. Sure, stocks are going up, but why? Is it because of sound money? Is it because of Biden’s sound fiscal policy? Is it that the U.S. is just the nicest house in a bad global neighborhood? We’ll get the answers soon enough. In the meantime, if you have concerns, maybe it’s time to look at your investments.
Action Line: Don’t let the thought of perfect bond yields get in the way of good enough. The Fed has a track record of being wrong—we just don’t know by how much and when. When you’re ready to talk, let’s talk. I want to hear from you. Email me at ejsmith@yoursurvivalguy.com.
Originally posted on Your Survival Guy.
