even the brokersage/investment banks don't have money...FED had to lend them money at discount window to maintain liquidity. 2% is a gift from the FED when inflation is 3% and rising
Who says it's risk free? What will you do if you got the bank and they won't give you your money because of "-Insert excuse-". What if there is a run on the bank? You can forget your money, short of whatever you can salvage while looting the bank. As for FDIC, lol, good luck with that. Just in June, I noticed my bank a major one) taking a couple extra days to clear a check because they were "verifying" it, whatever the f**k that means. 1 year ago they would clear the same check in 1 business day. They could have not cleared it for a week and I would have no recourse. Hence, I will be taking new measures soon.
That's interesting. Scary too!:eek: And FDIC... LOL!!! I agree! I hear it every single day: "I'm not interested if it's not backed by FDIC." Btw, my Wife has been telling me about checks being "slow to go through" our bank recently. Interesting!
Why not just identify the current bull and bear markets, and go long the former and short the latter, on conservative size positions? That's a pretty safe way to trade if you don't use leverage, and it sure beats cash with it's negative after-tax real return.
If you're in for the long run and dollar cost averaging, what do you care if the market tanks? Don't be fooled by those pointing to the market top in 2000 and saying..."see...we haven't had any growth in 8 years". Sure, if you invested EVERYTHING at the very top and never invested another dime, then yes, you have no growth. But if you're dollar cost averaging over many years, you inevitably buy more cheap shares and less expensive shares. Just move some to cash when markets look toppy, and then reinvest the cash in layers during a bear market. Again, who cares if you don't get all back in at the bottom? On top of that, dividends give you growth as well. If you had invested all through the great depression, and didn't go all in at the top, you would have made a fortune in the 20 years after the depression.
Exactly...or at the very least, during markets like this, identify some sectors to be short, take a small portion of your portfolio and hedge it short. Keep another portion (25%) on the sidelines, and put a small portion (like 5-7%) back in at layers of like every 5-7% drop.
Dividend yields averaged about 5% during that twenty-year period, helping boost the annual return to 8% (after inflation) for people going "all in" at the bottom in 1932. A significant difference between then and now: dividend yields were over 10% in 1932, today they are 2%.