Quote:
Originally Posted by retiredguy123
The Vanguard Money Market Fund is paying 1.5 percent, and the Vanguard Short Term Bond Index Fund is paying 3.33 percent. I think a combination of those two funds will outperform most online savings rates, even though you have a little risk with the bond fund.
It looks like the highest online savings rate is about 1.75 percent. I will stay with mutual funds for the cash portion of my portfolio.
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Even 3.33% looks lousy when the inflation rate is hovering around 9%. You still lose more than 5% of your savings a year. So sure, pull out the money in you mutual funds that are down 30% and put them in the best savings account you can find. Lock in that rate. And then, like two days ago, the Dow goes up 780 points in a day, and there’s a year’s interest or more that you missed out on. What is happening now in the market is mostly the expected aftereffects of closing down the country to a sizable extent for many people in 2019 as a result of Covid. It couldn’t be helped. But it will get better. Another big chunk is Russia’s dirty war in Ukraine. That will get better, too. Then the gas prices will drop even more than they have so far and the market will climb. Mutual fund prices will climb far beyond savings accounts. Prices will still be higher on many things because many restaurant and farm workers have received big raises, bringing their incomes, maybe, closer to not being in the poverty range. This is the fair thing to do, and we just have to live with it.