Experience tells us 100% allocation \u00a0to common stocks is a recipe for disaster, especially at my age (67). \u00a0So yesterday I went in search of the perfect cash vehicle. I’ve done this exercise for several years now. Increasingly I walk away from the day feeling totally miserable. But I have learned two important things:<\/p>\n
First, the \u00a0Fed reduces its rates. And the banks follow slowly, as reflected in this chart of rates being paid for saving at banks:<\/p>\n
Second, “the big fear” that bond prices will fall when interest rates rise has been a gigantic bugaboo — at least in the last five years. Every time I buy a bond or invest in a bond fund, I’m warned that value of my bonds will fall when \u00a0interest rates rise –as they must soon. But they never do. Meantime, I’m losing money by not “tweaking” my cash a little better. For example yesterday, I discovered that \u00a0My Vanguard New York Tax exempt money market fund was now paying the grand sum of 0.15%. A better deal would something like the Vanguard Limited-Term Tax-Exempt Fund Investor Shares (VMLTX) which invested in short-term muni bonds, is exempt from Federal (but not local) and pays 1.42%. The warnings about capital loss are somewhat moot, however. Check out this chart of the fund from the last ten years. Notice that it’s fluctuated within a fairly narrow range over the past ten years, taking its time to make its move:<\/p>\n Vanguard says the 10-year return on this fund has been 3.91%. Free of Federal tax, that’s not bad. This doesn’t go anywhere near NLY’s present 15.33% dividend yield but it’s also fluctuated more widely over the past ten years:<\/p>\n The lessons are:<\/p>\n 1. You need to look at your cash and cash equivalents regularly. Suddenly you can be earning nothing. And they don’t tell you “we’ve just dropped our rates, again.”<\/p>\n 2. You don’t have to despair and dump everything into equities.<\/p>\n 3. You should think of a broad allocation of \u00a0your “cash” investments. While less safe than bank CDs, bond funds appear to be ultra-safe — now the Fed is maintaining its anti-saver, pro-bank policy.<\/p>\n 4. You should keep looking. Muni bonds, for example, aren’t traded like stocks. You can’t look up their prices. A bond appears. It’s cheap. You have 5 minutes to make up your mind. (At least that’s all Todd gives me.) Then it disappears. Someone else bought it. That’s it. No more. Not like the stockmarket. You’re left stunned. You buy it. Hopefully, you did good. \u00a0My bonds have done wonderfully in recent years. Thank you Todd.<\/p>\n Solid state drives improve. They’re not dropping in price. But they are improving in performance. MaximumPC magazine reviewed the major drives and liked two drives the best — the OWC Mercury Extreme Enterprise and the OCZ Vertex LE. Both these are only 100 GB which is a bit small for my taste. The magazine also liked the $330\u00a0Corsair Nova V128,<\/a><\/strong> an updated version of the one I use (see the right hand column). This drive is bigger at 128 GB. As I’ve said before, a solid state drive (SSD) will speed your PC or laptop up faster than any tweeking you can do to the software and crapware on your hard drive.<\/span><\/span><\/span><\/strong><\/p>\n The future of bicycles?<\/span><\/strong> Acccording to Engadget<\/a>, t<\/strong>his Lexus bicycle has apparently been quietly making the rounds since the last year’s Tokyo Motor Show.<\/p>\n![\"\"](\"https:\/\/www.technologyinvestor.com\/wp-content\/uploads\/2010\/04\/SavingsRates.jpg\" "\\"SavingsRates\\"")
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