The 'cash is trash' mantra just makes me laugh, JPMorgan's Bill Eigen
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- Опубліковано 8 тра 2024
- Bill Eigen, JPMorgan Asset Management head of the absolute return and opportunistic fixed income team, joins 'Squawk Box' to discuss the state of the economy, why interest rate hike may actually be boosting the economy, the Fed's interest rate outlook, and more.
He makes a lot of sense
Agreed. Wish they would have him on more.
This guy has an easy job as a fixed asset manager if cash is the best option. He basically gets paid to not invest.
Yes I’m sure he is well paid to earn 5.1-5.5 from money market equivalents. But his argument against investing in bonds is a sound one. I’ve been doing the same thing for several years now. Avoiding the asset class of bonds and just investing in stock ETF’s and cash in money markets has worked for me. Now if I could just get paid as well as this “asset manager” then I’d be All Set!
thats why he loves it. he eats no matter what lol
@@alkayboe652He is correct about bonds. Just recently got the honor to manage my 90 year old fathers 401k and Schwab accounts and pops has been long in a bond fund amongst other funds. His last 10 year average is 7.7% overall, which for a 80-90 year old is right in line. But, that bond fund has actually lost money in 1,3,5,7,10 year periods, and only receiving a monthly dividend of on average $230. I am pulling his lettuce out of the fund, and for now park it in a 2 year CD, that will pay monthly at 5% with Wells Fargo.
But if rates will go lower, in maybe a year you should start to invest in longer term bonds. Whats wrong in locking a 5 year 5% bond, even if 3 month is at 5 as well??
3% annual inflation? that means have -3% return on your cash holdings. a real genius no doubt!
Interest rate is 5% on cash. Are you dumb lol
Obviously you don't understand much. With inflation around 3.5 or even 4%, a CD or T bill earning monthly 5-5.50%, makes a positive. Most conservative investors that plop money in fixed income, are for preserving their money. With a rocky overbloated stock market set up for a major correction, a CD or some T bills are a easy choice. His clients no doubt are highly diversified, and especially older retirees, are more inclined to hold onto their wealth. Not chase high flyer P/E stocks or the latest fad stock or fund.
When you are much older, you will do the same.
@@wa210 I agree with you on CDs, T bills & fixed income. Holding all those things doesn't mean holding cash, it means investing money in all those financials. I am 100% in short term bonds right now and profiting from it every single day (well maybe not really profiting from it but at least preserving my purchase power). There is only one definition for cash: money in the form of coins and banknotes, especially that issued by a government. To my understanding when this guy talks about cash he means "cash" and not other things. This is why I say this guy is a genius: holding cash when you could have bond & T Bills, CD is not optimal.
@@safewaycart I follow what you are saying. I think lots of youtubers think holding cash is stuffing it in a mattress. I myself am 70% CD's and 30% dividend stocks now. Sold off some high flyers last year that IMO were ripe for a correction. I actually got lucky with my thinking, selling TGT, CVS, LMT and one loser LEG.
MAIN has been my best perfomer for a good while, which I bought strictly for the MONTHLY dividends and occassional specials. I think today investors took profit on it since recent run up. I just keep holding and dripping.
My cash is all in CD's in a monthly ladder, where 1 matures every week or two. Ranges from 5-5.50% pay out every month instead of at maturity. That interest cash goes into SPAXX or FDRXX in Fidelity. MM funds of 4.95-5%. When i see a good short term rate, I just roll the money over into another CD. For me, doing ok around overall 8% return, which is my goal while in retirement.
There is no one more boring to talk to at the cocktail party than the Bond Guy.
We’re so f$@ked as a nation. 🤦🏻♂️ We’re well past balancing the budget
He meant US Treasury = cash here, yielding 5% here. Risk-free, better than a lot of assets, especially the fixed income assets. The Treasurer in my company said the same thing.
5% thats a joke. Nvidia went up approx 220% in a year.
@@TB1M1 He meant fixed-income. NVDA is equity. It's outside the scope of his job.
@@TB1M1It can also come down that much as well.
I am thinking here, you are younger and never ever seen a bear market, right?
When the sheeeeit hits the fan, and it will eventually, those high flyers like tech will dive and dive hard. Everything will take a hit, some more than others. It will be like a run on the bank, and perps trying desperately to bail. Sitting in cash like T bills or CD's getting a easy 5-6% will look mighty good when the market is in freefall.
For all the people complaining, this is a fixed income guy its not in the scope of his job to look for meaningful growth, but to preserve capital with marginal growth. For retirees this is an important part of their portfolio whether you like it or not.
5% isn't all that bad when its for free and you take on virtually no risk.
Here is my take: The two shirtsleeves dudes need to trade up to larger shirt sizes. They are stuffed in, baby.
raise the rate, a lot!
Cash is king.
We also say open more banks and raise FDIC ins. It crazy ever month go all the banks to take out money to keep under 250k.
Quoting nominal returns is pretty useless in an inflationary environment.
Rates go up means corporations can justify price gouging while hiring people at wages that are far below inflation to achieve higher profit margins y/y. Perfect way to keep the average worker asleep to their strategy.
People who don't have 20 year outlook when investing shouldn't even be in markets, 5 years is not adequate.
Cash is king. And they won't it. A cash has to happen
No one is in the stock market when you get around 5% in a MMA that risk free!😁 Even Warren Buffett is in cash now!😮 Federal Reserve speakers love to play games too!
Warren is not all cash...please provide a source for the claims you make.Do some research.
and cash lost over 30% in 3 years.
Nope. But nice try stock wizard.
@@wa210 So there has been no inflation for those 3 years?
@@walden6272 I didn't say no inflation. My meaning is cash is not lost, but preserved. For last year or so, cash finally been beating inflation. Cash is king when a stock market crashes, which it will. When? Who knows? But ripe for a crash overtime. Then you see bailers running to get out and into cash.
@@wa210 How can cash beat inflation when your money buy less?
Long bonds lost, not cash. Even cash has a maturity, wich is near zero.but i think hes wrong. You shouldve owned shorter duration since 2011/2013. But now, since in a year will most probably start to lower rates, we should get back to longer duration bonds. Im saying it again, whats the problem in locking 5% for 5 or 10 years? You want to lock it for only 3 months? Ive had money markets since 2018, but now with these rates im buying longer bonds
is that guy taking bets on his bet on cash? 2yrs lock in
",rate hikes boost economy " bull say anything
Being a global leading country, you definitely can't grow a country's economy based on fixed income. You need to invest, invest and invest! You need to produce growth efficiently.
Diversify, diversify, diversify. Nobody goes all cash, except actually not a bad move for one 80 years old or above. They have no time to make it back, when the market tanks. Which it will. A cool million in a 5% CD or T bill dishes out 50k a year in income. Add that to their SS and a pension, along with RMD withdrawals, makes for a easy retirement stream.
Cash is terrible, at least the S&P500 matches inflation. They won't increase but probably wont decrease for a while either! This guy steered clear of bitcoin, I wonder why.
Wow I wish I could get paid to be stupid on television
Whoever investing under this guy is fool. You are loosing your purchasing power
This might be one of the most laughable videos I’ve ever watched. Makes 0 sense for anyone to invest in treasuries unless you’re retired or plan on retiring in the next 5 yrs. The 5-10 yr treasury is 4.5% and inflation is hovering close to 3.5%. So essentially you’re only technically getting a 1% return on your money, while paying taxes on that money. The S&P 500 is up nearly 10% YTD. Makes 0 sense to invest in treasuries and to say cash is the best way to go at this moment for someone who is more than 5 yrs out from retirement.
Clueless
Buy Gold:
Monthly=10B
Yearly=10B*12 Month
Yearly=120B
60 Year=120B*60 Year
60 Year=7,200B
Yield(Average)=8%
Yield(60 Year)=(1.08^60)*7,200B
Yield(60 Year)=729,500B=A
Debt=35,000B Yield=5%=1,750B
Payment=2%=700B
Outstanding=Yield-Payment
Outstanding=1,750B-700B=7%-2%
Outstanding=1,050B=3%
Debt(60 Year)=(1.03^60)*35,000B
Debt(60 Year)=206,300B=B
If A>B=Surplus
Payout(60 Year)=729,500B=A
{
Debt(60 Year)=206,300B=B
Balance(60 Year)=523,200B
}
Thank you.
I rather buy small caps, wait few years and get +50 years of Gold returns x 10 within a single decade, Thank you!