Where to Park Brokerage Account Cash?

[rickf]

Quote from zdreg:

any investment that purports itself to be nearly riskless and pays 2 or 3%above market rate is a high risk investment. you are obviously no mike milken.

I never said the investment purports itself as riskless - it's what I believe the risk to be based on my own judgment.

You do your things your way, I'll do my things my way. If we differ in our approach but still are comfortable in our decisions and positions and can sleep well at night, who cares?

That approach has served me well and will continue to serve me well.

 

[da-net]

Quote from rickf:

I never said what I was doing was risk-free or the equivalent of making a bank deposit. You still need to watch things -- but rather than earn .000000001 at Bank of Serta (or Sealy) I'll take 2 or 3 percent on it with slightly more elevated risk.

have you considered yuan denominated bonds sold in Hong Kong...the rates are not great, but the appreciation against the dollar is worth considering

 

[oldtime]

how long do you want to park your safe cash which must not be just safe but also working for you?

The only way I know is to buy treasuries and hold them to maturity.

That way, rates can go sky high and your bonds or notes will decline in value but you will still get your principal back plus interest.

If that aint good enough for you you can also short the futures as a hedge.

There is no such thing as cash anymore, you are always long or short something. You may think you are flat, but all you are is long the dollar.

 

[jeb9999]

Quote from rickf:

I never said what I was doing was risk-free or the equivalent of making a bank deposit. You still need to watch things -- but rather than earn .000000001 at Bank of Serta (or Sealy) I'll take 2 or 3 percent on it with slightly more elevated risk.

And what type of elevated risk are you willing to accept for that 2% to 3%?

10 Year notes are at 1.86% and 30 Year bonds are at 2.91%.

If you convert your USD to AUD, AUD LIBOR is at 4.41%.

The junk bond ETF JNK yields 6.80%.

I think I'll just accept the 0.00% for now on my brokerage account.

 

[rickf]

Quote from jeb9999:

And what type of elevated risk are you willing to accept for that 2% to 3%?

10 Year notes are at 1.86% and 30 Year bonds are at 2.91%.

If you convert your USD to AUD, AUD LIBOR is at 4.41%.

The junk bond ETF JNK yields 6.80%.

I think I'll just accept the 0.00% for now on my brokerage account.

Some decent corporate bonds, floating-rate notes, and even some LT-agency backed stuff, for example. But as I said, risk is what each of us takes it to be. Nothing is risk-free and I'm not committing all my cash to any one thing, either.

It works for me and I sleep well at night. YMMV.

 

[KINGOFSHORTS]

Etrade offers .5% interest on cash in the non extended FDIC sweep. Limit is 250K though.

250K would amount to 104 bucks a month in interest payments. Good if you have a cash secured SPY put selling account for example. (it self directed IRA,etc..)