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so why would seniors have sat in cash instruments for years when the fed did everything but drop leaflets from helicopters telling you to shift to at least bonds.
Are you kidding me? The last 35 years were the best ever for savers. You have been making money left and right buy just buying the safest of all vehicles, T-notes and the t-bond. Have you been living under a rock?
Cash is an asset class like any other asset class. Holding it at the wrong time can be quite painful.
Negative rates after inflation and taxes are no fun. all one had to do was pay attention to your money and switch to bonds.
if you had no desire to pay attention then you payed the price.
low rates are not because of the fed . low rates are because of the condition of the world. the worlds rates are lower and even turned negative on some of the bonds. we have some of the highest rates around for a safe country for the world money.
Cash is an asset class like any other asset class. Holding it at the wrong time can be quite painful.
Ordinary people shouldn't have to know stuff like that.
They should be able to just put their savings in a bank and earn 4-5% on it and forget it.
This is just another way that Wall Street is sucking Main Street dry. This, in combination with costs associated with 401ks just ensures that many many people won't have anything but Social Security to retire on.
People on this board usually understand stuff like "asset class," but there are really intelligent people who's eyes just glaze over when you talk about it outside the nerdy company of this group.
There was a reason that interest rates used to be what they were. Cash had a certain value and time also had a value. Combined you had the time-value-of-money. Now we just have manipulated crap.
"We" all like what they are doing because "we" like to screw around with investments. What I want to know is how many small businesses aren't getting loans because there is no profit in loaning money any more?
Now, they are stuck and there won't ever be a graceful way to return to "normal" and it won't end well.
Ordinary people shouldn't have to know stuff like that.
They should be able to just put their savings in a bank and earn 4-5% on it and forget it.
Why should they be able to do that and forget about it?
Quote:
People on this board usually understand stuff like "asset class," but there are really intelligent people who's eyes just glaze over when you talk about it outside the nerdy company of this group.
There was a reason that interest rates used to be what they were. Cash had a certain value and time also had a value. Combined you had the time-value-of-money. Now we just have manipulated crap.
"We" all like what they are doing because "we" like to screw around with investments. What I want to know is how many small businesses aren't getting loans because there is no profit in loaning money any more?
Now, they are stuck and there won't ever be a graceful way to return to "normal" and it won't end well.
Sucks the world isn't a static place, gotta adapt to survive.
Cash is an asset class like any other asset class. Holding it at the wrong time can be quite painful.
Negative rates after inflation and taxes are no fun. all one had to do was pay attention to your money and switch to bonds.
if you had no desire to pay attention then you payed the price.
low rates are not because of the fed . low rates are because of the condition of the world. the worlds rates are lower and even turned negative on some of the bonds. we have some of the highest rates around for a safe country for the world money.
But you are only saying this with hindsight. How could one have known in, say, 1997, that long-term rates would drop 4 percentage points between then and 2012/13/14? And in 2004, it was certainly not to be expected that the then fed funds rate of 1% was not at the lowest it would be for a long, long time?
The problem with shifting to bonds is that it only makes sense if you already have reason to expect further rate declines.
Ordinary people shouldn't have to know stuff like that.
They should be able to just put their savings in a bank and earn 4-5% on it and forget it.
Now, they are stuck and there won't ever be a graceful way to return to "normal" and it won't end well.
Interesting. You would have probably said the same thing in 1993 with adjusted numbers:
"They should be able to put their savings in a bank and earn 10-15% on it and forget it."
"There won't ever be a graceful return to return to "normal" from the ridiculous 4-5% we have now."
Nothing works as good as our own bias defining reality and "normal" for us.
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