ICSH
iShares Ultra Short-Term Bond ETF
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Does a 1/3 3x Equity ETF & 2/3 cash make sense now with cash paying 5%?
Ultra-Short Bond Funds turned were a terrible non-stock market investment!
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I love ICSH and use it extensively. For tax free, I use JMST.
PYLD, VFLO, and QLTY. ICSH and JMST for ultra short duration bonds.
A lot can happen in 7 or 8 years. Have you ever looked at ultra short duration funds like ICSH? I’m not taking that kind of risk right now with bonds. Shorter duration credits senior on the credit stack are probably better. You can also scan your custodian for corps maturing in 36 to 60 months and see what YTM you’re getting. If this is supposed to be what you put your cash in, that’s not a great idea.
ICSH or JMST (munis - use if your tax bracket is 35 or 37 percent.)
If all you want is basically liquid cash I would suggest: BIL, SGOV, SCUS, ICSH, JPST. All of those are cash equivalent funds. It is basically impossible to time exit and entry points in the market. If you have a good mix of stock/bond (80/20, 70/30) then in bear markets you can reallocate money from your bonds into your stock funds.
JMST for tax free and ICSH for taxable. Make sure to calculate your TEY.
I’d take some off the table. This is also my strategy when I gamble. If I am up, I start by taking out whatever I put in, meaning everything else is play money. If you keep skimming into your keep pile, when the play money is gone you stop and you end up up, which is hard for a lot of people. To be clear it s mostly losing because that is the way the odds are in gambling. Investing isn’t really gambling, but you can trade potential returns for safety. Decide how much you are willing to risk, throw the rest in SGOV or ICSH. This is a plus strategy in my mind, it’s the old “ adjust your portfolio percentage depending on your outlook/risk tolerance” I will say, 100% stock is the best returns backtested. No other portfolio or strategy works better over the long term except perfectly timing the market, which is a chasing fools gold.
I can’t get with the “all-or-nothing” thinking. Thinking like that and acting accordingly is nothing but trouble in life, including investing. Selling everything, all at once, I can’t support that. I am shifting to less risk, for me it’s a process. I’m carefully selecting positions to reduce holdings, and sliding those funds into safer investments. I evaluate each holding. For example, I reduced my SPHQ position, because I believe that it will see a large drawdown in a general market correction. On the other hand, I believe that NVDA is a great company, and that investing in AI is an opportunity of a lifetime for me. I’m not selling any NVDA. I like CLO ETFs, I chose JAAA and CLOZ. I also like “managed futures” funds, in particular CTA. I didn’t know about ICSH, that looks interesting. I can’t see how “I’m selling everything” could be an optimal solution to a riskier market environment.
If I were you, I wouldn't sell - at least not ALL of it. Consider this: You invest in large-coverage equities (anything that tracks S&P500, I use VTI) for this exact reason: to weather volatility. If your investment horizon is 10-20yrs minimum, (as in the correct amount of time to plan for with this type of investment), then it's almost always a better play to just keep your holdings and continue to invest regularly (DCA baby!). Sitting out for 3-4 months isn't an insane approach, but if you do, don't just keep it in cash, as inflation will erode it. In the same position as you, with the same anxieties, I decided to push my portfolio a little bit towards bonds (didn't sell any of my positions, just invested the part of my income I would've been putting in VTI into bonds until I reached my desired allocation). Look into ICSH, iShares Ultra Short-Term Bond ETF, designed to be used as a High Yield Savings Account. I hold about 30% of my money in there for 3 main reasons: 1. Because it's all bonds, you get to take advantage safety of this type of investment. (See ICSH's past performance: fluctuations occur at regular intervals and always stay under 1%) 2. The typical downside to bonds is that you're tying your money up for potentially years at a time. By investing in them via funds like ICSH, you maintain access to your money while still reaping benefits 3. ICSH yields 5% dividends (paid monthly), which is much better than many HYSA options. I'm not sure what you have access to, but my highest option for a proper HYSA is only a 2.25% return. My plan is to keep this 30% in cash for a couple of months like you, and if the market seems to dip then buy back into VTI or similar until I'm back to my usual 80-20 split. Take this, like anything you read here, with a grain of salt of course lol. I am 20 and split many expenses with my girlfriend, and can afford to invest for a long horizon (as a means of weathering the volatility of events like these!). I'm based in Canada, FYI, so please be sure to research avaliable options specific to your country so you don't get hit with foreign income tax or anything like that!! (I'm sure you know that already lol). My parents had this exact same question a few weeks ago and the above comment is a rough distillation of where we landed. Best of luck, and please let me know if you want clarification or more info on anything.
I'm mostly in equities + covered calls. Concentrating more on fixed income. JAAA, PFFA, MSDL. Sold ultra-short treasury funds & bought ICSH.
I assume you realize that both are bank savings accounts. A money market account is not the same thing as a money market fund. Since this is an investing subreddit and not a bank savings subreddit - I normally would suggest keeping the funds in a brokerage account to generate yield on cash. I personally do not ever see any value in using a high yield savings account - but I recognize that some people like the idea of keeping money in a depository institution (ie bank, credit union, S&L, etc.). In general - if you just want to generate yield on cash - there are more flexible ways to do that in a brokerage account than a bank account. Assuming that your broker provides access to fixed income products - if you simply want to generate yield on cash - you first have to decide on your personal risk tolerance and liquidity requirements. Liquidity refers to whether you think you need access to funds for something else in some estimated time-frame horizon. For example - if all you simply want the current risk-free rate with liquid access (similar to holding cash in an interest-bearing bank account like a hysa) - you can simply park your cash in a money market fund. Depending on your tax situation and state of residency - you could consider using either prime, treasury, or muni money market funds. A money market fund is also be more tax efficient than a bank hysa or money market account. You don't have put all 15k into a single investment either - and you can adjust it based on your potential liquidity needs. For example - if you think that you will need that 15k in 24 hours - then you use a highly liquid production like a money market mutual fund. But most people don't usually need their emer fund all at once - especially if they can draw on credit lines - So from a risk, liquidity, time-frame perspective - there are lots of different investing and yield generating options beyond using risk-free to low-risk cash-equivalents. For example - you can ladder your emergency fund or use longer duration cash-equivalent products like SGOV, ICSH, etc. Or you can increase credit risk slightly using ultra-short duration investment grade products like MINT. It really depends on how much effort you want to put into managing your cash and other factors like risk, liquidity, convenience, etc. etc.
I use these ETFs: BND, BSV, XONE, XHLF, ICSH. I use them to reduce overall volatility of the portfolio and almost as a cash equivalent. All these except BND are short duration and super cheap.
This brokerage is my playground, 8ish%. 1.2m in ICSH, MINT, SHV. I need pointed towards things to play with. The above loss was IBRX, a biotech that looked like it had cleared all the hurdles. I.E. FDA Approval, manufacturing, strong pipeline, drug with efficacy, etc. But dumped from 8 to 4 over the last several months.
I'm always buying. I was getting internet bubble vibes, I know this time is different, but I was buying actively managed bond funds: ICSH, BINC and PYLD. Yesterday and today, I added to several of my dividend stocks: AVGO, ABBV, JPM.
GOVT and chill. But keep a portion in ultra-short treasuries like SGOV/CLIP and floating rate treasuries USFR/TFLO. If you live in a state that taxes treasuries, go for ICSH. You can sell the ultra-short funds when the yield curve un-inverts.
VGLT - for long duration with low expense ratio EVTR- for mid duration. I think a good mix right now is ICSH, JAAA, EVTR, VGLT, VCLT
ICSH gets you close with zero hassle
As u/Squezeplay mentionend - you have to increase credit and duration risk if you want better yields. So that means that the ETF must have longer duration and credit grades. There are ultra-short duration active bond funds that you could consider - but you must understand that's not the same as a money market fund or ultra-short duration treasury fund. For cash management other than money market funds - I primarily loan via SPX box spreads but there is an ETF called BOXX if you prefer an ETF. I also use MINT and ICSH for ETF based cash management.
Some relevant background learning if you are not aware: You have to pay for safety. On a real basis, after tax, etc, "safe" assets generally lose to inflation(with rare occasional exceptions). Roughly in order of safety: * FDIC insured accounts (HYSA, CD's, etc) * Treasuries(to include I/EE bonds, tips, etc) * Money Market funds(MMF) (SIPC insured) * Cash like ETF's (SGOV, ICSH, USFR, etc) * MYGA's (SPIC insured) * Bank Accounts not FDIC insured, i.e. you went over the FDIC limits. * Stable Value Funds (SVF) * Municipal Bonds (not guaranteed, but generally state income tax free) * Short term bonds * Medium term bonds * Long term bonds * Real Estate(un-leveraged, i.e. no mortgage) * Preferred Stocks * Annuities, not SPIC insured * Leveraged Real Estate (i.e. mortgaged) * Equities FDIC insured accounts, MMF, generally lose to inflation. Some treasuries should keep up with inflation at least(TIPS, iBonds, etc) but after taxes, you probably won't. MYGA's are in the same boat, you might be able to beat inflation, but maybe only barely(and involve lots of insurance paperwork, apparently) and after taxes, doubtful. Bonds can beat inflation, but there is zero guarantee. bonds except for the past 40-ish years have not even kept up with inflation. This is the rare occasional exception, alluded to earlier. Real Estate will probably keep up with inflation, and if you treat it like a real business, you might even make some money. Preferred stocks should beat inflation, but takes on considerably more risk than everything else above it, but after taxes you probably can make a little. Equities should handily beat inflation, risk is obviously higher. The safer the money, the less people are willing to pay you for it. There is no free lunch.
Are you in the US and can open US brokerage accounts? Assuming that's the case, then I'd say it depends on how you define short term? If it's around a year or less, cash or cash like things, say a MMF(or ETF equivalent[0]) is very reasonable. If it's 1-5 years, bonds in the proper duration, say US treasuries would make a lot of sense. If it's 5 to 10 years, then perhaps you want to dip into some equities, say something like the ETF AOK, which is 30% equities and 70% bonds. This should give you a 10-15% max volatility in the worst case, which might be reasonable? But just bonds would also be totally reasonable. 0: SGOV, ICSH, USFR, etc. There are plenty of them.
Thanks! AH! Stupid typos! :) Totally true, it is ICSH: https://www.ishares.com/us/products/258806/ishares-liquidity-income-etf Thanks!
Smart. Set aside the assumed cap gains % of that and store it in ICSH, collect ~5% risk free.
Unrealized gains can evaporate. If you need money, I'd bank the win and set aside the capital gains in a money market like ICSH. Just an opinion.
Expected annual return is ~ 8 to 10%. We're already there on S&P. Probably akes sense to pick in another 5% annualized risk free for a bit. Calls on ICSH.
all of sudden incredibly bullish on SBUX for a rotation. there consumers aren't hurting like the lower end MCD / DLTR types. China rebounding a bit, and you know those guys need caffeine for the 996 gring. it's either that or ICSH to park money for a bit.
ICSH JPST then just transfer to checking account when funds are needed
Wouldn't GSY or ICSH have easier liquidity than to wait for EOD for your trade to close with SPAXX?
Short Bonds are 2-years or so. "Ultra Short" is 1-year or less. I've seen 3-months, 6-months, and even 12-month "Ultrashort" funds. Like ICSH (6-months) or VUSB (1 to 2 years).
ICSH rather than a money market or CD. Intra-day liquidity, 5.56% 30-day SEC Yield, and 0.08% expense ratio, with the same risk as money market funds.
>Reply Can't you jus buy ICSH or SGOV on RobinHood instead of paying 5/month?
a money market fund like VUSXX has daily accrual. The share price stays at $1 and the interest accrues on the backend and is paid out at the end of the month. If you sell before the end of the month you will still get your pro rata share paid out to you. For ETFs like ICSH or SGOV, the interest is captured within the market share price. So you'll see the share price rise each month and then drop on the ex-dividend date as the dividend before the dividend is paid out. So if you sell part of the way through the month the interest appreciation will be captured in the higher share price. Look at a price chart for SGOV or ICSH and you will see how it rises and falls each month as interest is captured in the market price, and then drops when the dividend is paid out.
Just buy an ETF like ICSH or SGOV to earn 5%+ on your cash. My broker lets me buy mutual funds for free so something like VUSXX works as well. It is an extra step instead of simply and easily earning interest on the sweep account, but it works.
For sure. HYG typically moves/correlates well with tech and other risky assets. Generally speaking it's not bad when markets aren't frothy, but you're buying at a premium compared to the beginning of the year. That being said it's currently like 0.25% discount to NAV (Net Asset Value). Right now if you're just looking for yield and somewhere to park cash maybe look at BIL, VGSH, VFISX, ICSH, SHY. Another alternative would be finding a money market account or a short term CD through a bank. Some banks are offering 5.3% APY on a 3 month, so you'd effectively collect about 1.3% over the term of the CD. If you do go that route ensure it's not on auto renew.
High interest savings accounts are really just like ultra-short term bond ETFs right? There are many such ETFs/funds for that here (Vanguard's BSV). Or ICSH (BlackRock's Ultra Short-Term Bond ETF). In Vanguard if you just leave your money in the default 'settlement fund,' that's just a money market mutual fund that yields something near the current Federal Funds Rate, as do the various short-term bond ETFs (roughly speaking).
I'm about 50% cash in CD's and ICSH. S&P500's average annual return in the last 20 years is about 9%. 5% return on CD's will underperform in the long run, but I sleep much better knowing the returns are guaranteed. High yield bond ETF return 7-8% which seems to offer better risk vs. reward compared to equities. I'd probably buy that before I buy more equities.
There are others you could move to, but you can also trade into a money market fund at your current broker and then trade out if you need the funds for trading. ICSH is one to consider and it trades just like any stock, but there are others as well. Do a search on this sub as this is asked all the time.
You can buy shares of a money market funds and then sell those if and when needed. I've used ICSH in the past, but found the tiny returns to not be worth it. Keep in mind that these funds can tank during a market crises when you would need them the most. Look at a chart of what these funds did in March of 2020 during the covid crash . . . IMO this is just not worth the risk or hassle.
Some ppl in reddit. I have no idea what mm funds or CDs are, I don't live in the States. In my country I use an account that gives me a 1.68% + Inflation adjustment a year, so I won't lose value, but it's not like I'm earning much, thats why I thought maybe a little stocks and a big slice of ICSH / SHV, but I don't really know.
What's wrong with gold? I honestly have no idea and wanna learn. I'm pretty sure it reduces volatily and in consequence inproves return in the long run. I wanna invest but in a more conservative way, with no more than 40-50% stocks, I was planning on ICSH and SGOL. I know nothing about REITs.
What about ICSH to hold money? or SHV
ICSH is paying 4.65% and is similar to a money market fund.
Maybe. It depends on the type of account you have and your broker. Some can open a short put for 20% of the cost of the shares being held by the broker, but others will have 100% of the share cost held for a true "cash secured put". If your account only requires 20% to be held, then you could use the other 80% in some kind of highly liquid money market fund or other investment so long as the cash can be made available quickly if assigned. Some use the ICSH fund as it is highly liquid, but you will note the returns will be small. There is also some risk the stock price may move during the time it may take to trade the fund shares and have the cash to close the share position. A margin loan could be used in the meantime but would pay interest that could offset the interest collected. If it helps, I tried this some years ago and found the hassle was not worth the small extra interest earned, but you do you.
SGOV/ICSH tend to be cheaper, they are also ubiquitous, you can buy ETF's everywhere, MMF's tend to be tied to a brokerage and are not available everywhere. Not really an advantage, but a differentiator, MMF's tend to be stable value, i.e. they like to keep tied to $1 NAV. ETF's are not tied that way, so the NAV can shift in either direction. Obviously the downside is T+2 settlement, MMF's tend to sell immediately. Meaning you can generally take money out of an ATM and the MMF will auto-sell for you. There is no chance that will happen with an ETF. ETF's can also go out on risk further than most MMF's will ever dare. This could be good or bad, as risks almost always show up eventually.
The difference is slight, but could be relevant. Why do you think you need both? If you want the closest thing to cash, SGOV and/or ICSH is your better bet, if you don't want a MMF. Generally speaking, the further out on duration you go, the better your rate of return, because like always, you get rewarded for taking risk(s).
Or something more in line with an ICSH. I like a general BND or BNDW myself, but he prefers an almost cash equivalent in that famous recommendation.
You can try something like ICSH but the interest made is so small to make it not worth the hassle IMHO . . . Keep in mind that this cash is not just sitting there doing nothing. It is there to help manage positions when needed as options are already leveraged. This cash can help prevent losses and take advantage of trading opportunities.
Scenario 3: Interest rates go up, but the agency doesn't bother to call the bond. Or they call the bond but out in year 3 or year 4, because they finally noticed they were paying more than they had to. Regardless, when it comes to bonds, you should buy at the duration you need and no more or no less. The except is, if you don't know the duration you need, lets say because you are just exposing yourself to a fixed percentage of bonds as part of your asset allocation. Then you have 3 options: * Be lazy and own all of them, BND/BNDW * Go for the hopeful arbitrage win and crazy volatility with long term bonds, say TLT/EDV * Keep it in the short term with something like SGOV or ICSH I guess you could do option 4, and try to market time and win in the bond market, like Bill Gross(known as the Bond King) did trading individual bonds. You should note you will be trading against institutional investors that will have billions of dollars and teams of people trying to beat you. It should also be noted that the bond market is not public, most bond trades never cross a public bond desk. To trade with the real bond traders you generally have to have at least 1M USD per transaction. Good luck!
Note that generally you *do* get paid daily interest in the form of ETF appreciation. I like to use ICSH, and you see there is a slight upward slope in its price over the 30 days between ex dates
Ah. Yes there can be delay, and that delay could cost you money. One easy/lazy solution is to use an ETF like STIP or SGOV or even ICSH which are all short term bond funds, and will keep you invested through maturity of individual bonds. Many brokerages will let you set up a bond ladder, Fidelity's Bond Ladder system is pretty good, and will keep you invested auto-buying from maturity on the same day. As for the delay in transferring funds to your brokerage(Fidelity in this case), if you use a wire and not ACH, then it can transfer same day. If your bank and brokerage are the same place(Schwab and Merrill both have their own banks) then you can transfer between them, with basically no delay. But mostly I'd say unless we are talking about reasonable large amounts of money(1M+), a day or two of interest won't be enough to really care about.
Cash slowly turns into bonds as you go up the risk ladder. I'd say cash is best for 3-months and less. HYSA, Money Market, and BIL (US Treasury Bills fund) all are roughly the same in practice. FRN are also 3-month-like instruments. At 6-months of risk, you begin to open up to slightly higher interest rates. ICSH definitely makes more money than the short-term stuff. At 1-year of risk comes VUSB, 1-year Treasuries, and the like. Classic short-term bond funds, such as BSV, start at the 2.5 year duration or so. Then... > Mid term (4-7 years): bonds. Risk of loss, but with that timeline you should earn more than cash. This is a good way to describe typical bonds, such as the ETF BND. But keep in mind all the lower-duration funds that are available.
>Aha how would you execute on bonds - the answer might be to reduce duration risk you can buy what iShares recommends - like ICSH or NEAR for a 12 month expected holding duration. In hindsight I would have bought very short duration bonds or cash. But well, if I had a time machine, investing would be a lot easier. Though I can mention that I refinanced my 30-year mortgage near the bottom in interest rates, and the mortgage size is bigger than the bonds that I purchased. So rising interest rates and inflation actually improved my bottom line overall. ​ >The stock market has gone sideways for like 6 months. How is it possible that AIEA suggests any changes? Is it due to bond holdings increasing? Are you looking a the same chart as me? [https://www.tradingview.com/chart/?symbol=SPX](https://www.tradingview.com/chart/?symbol=SPX) I'm seeing a steady decline, with bounces, since January.
Aha [how would you execute on bonds](https://old.reddit.com/r/investing/comments/on11bs/bonds_vs_stocks_and_short_term_returns_now_is_the/hambs4w/) - the answer might be to reduce duration risk you can buy what iShares recommends - like ICSH or NEAR for a 12 month expected holding duration. The stock market has gone sideways for like 6 months. How is it possible that AIEA suggests any changes? Is it due to bond holdings increasing?
BSV, VUSB, ICSH, and my cash position is in SWVXX.
One month? MMF like VMFXX are probably your best bet. Maybe BIL, ICSH, and VUSB (least risky to most risky)
Yes, unfortunately we can't get those rates. Some company(mostly banks) gets to charge us some % fee instead, and sometimes the fees are ridiculous: * The Federal Reserve will pay 2.56% for cash deposited with them. * Bank Of America pays 0.01%, for a fee of 2.55%/yr. * Ally bank pays 2.25% for their savings account for a cost of .31%/yr * If you are willing to hold cash in an ETF, ICSH will hold cash for a 0.08%/yr fee. For the record, I'm not against Bank Of America, I have an account with them, but I don't hold much, if any, cash with them for any length of time, because I know they charge a lot for that service.
I use Schwab and would expect Fidelity to be similar. I bought my first bonds yesterday. I went to the Bond section, selected a 1 year ladder and bought a 3, 6, 9 and 12 mo bonds. Minimum was 1, so about $1k. T-Bills are sold at a discount. I’ve been using a mm mutual fund and ICSH. I’ll build these then build my ladder.
VMFXX, ICSH, VUSB. Money Market funds, ultra-short duration bonds (6-months), and ultra-short duration bonds (1-year).
Yes, my automatic investments into an S&P500 mutual fund keeping buying. I am not as aggressive with available free cash. Mostly putting extra cash into ICSH. My dividends are being reinvested.
2% APY on savings isn't rare, Ally and good MMF's will return that. If your brokerage charges high fees on cash(many do), then you can always hold ICSH or SGOV(both over 2%) or other short term ETF funds.
Which instruments? Black rock ICSH ultra short bond etf is only 2.77%
> What’s the best short term investment I can use with that money before paying the man? The best depends on what you want to do with it. If 6-months is your aim (I'm assuming you're looking at April 15th 2023 as your tax date?), you've got the following: * HYSA * Money Market Account * Money Market Fund * 1 Month Treasuries repeatedly * 3 Month Treasuries repeatedly * 6 Month Treasuries once * Higher-risk bonds * * Investment grade short-term paper (Bank of America, Microsoft, etc. etc.) Also in 1 month / 3 month / 6 month maturities. * * Junk grade short-term paper * * Tax-free Municipal bonds, of various risks (Detroit, California, Texas, etc. etc. Each has its own risk / gains) * * Taxed Municipal bonds ---------- Any interest from Treasuries is taxable to the Federal Government, but not to municipal funds. Finally, there's funds, which are baskets of bonds that roughly say "all of the above", to some degree. ICSH probably is the closest ETF I can think of to your respective timespan (Commercial paper backed / Investment grade paper).
Put your money in a competitive high-yield savings account / money market account. Definitely the "easiest", but you don't have much control. (The banks will be buying short-term treasuries behind the scenes). If you want to actually buy them, Treasury Direct will buy/sell bonds for you in the raw. This is difficult for various reasons, but I suggest you play with a few thousand bucks here. (Its safe, and personal experience with Treasury Direct is great, since it gives you insight into the raw bond market). In between are "bond funds", such as ICSH, VUSB, BND, etc. etc. Not as easy to use as a money-market/savings account, not as hard to use as the raw bonds.
I've been struggling to fully understand all "near cash" instruments, CDs and 1-years included. CDs are FDIC insured. Bonds, even 1-year bonds, **can** lose value. So CDs are "much much safer" (almost no way for you to "lose money"), while Bonds losing money is... well... take a look at this year. Each +.75 hike is a ~.75% loss on a 1-year bond. To reduce risk, people buy **ladders** of shorter bonds, ex: 6-month bonds. Except at this point, you're basically into "make your own CD" territory, which is nice (a bit higher rates), but still with the risk of losing a tiny bit of money on interest-rate hikes. ----------- It honestly sounds like you want either a money-market fund, high-yield savings account, or maybe a bond-fund. * High Yield Savings Accounts / Money Market -- Money Market loses the FDIC insurance, but otherwise acts almost identically to HYSA. You get ~2% from these today. * Money Market fund -- Almost the same, except from a brokerage. Sometimes come with a debit card but sometimes not. * Short term Bond Fund / ETF -- Ex: ICSH and VUSB focus on 1-year and shorter bonds. Though these are AAA-rated commercial paper instead of US Treasuries. ------------ IIRC, Savings accounts **must** invest into Treasuries, while Money Market is allowed to branch out into AAA-rated commercial paper. There's some minor differences like that. But these are all considered very safe instruments. Savings accounts are the safest, with FDIC insurance.
You can buy insurance for most any options trade, but this insurance can lower the profit which is what is happening here. If you want to buy insurance do so farther OTM for lower protection but also smaller losses if the stock doesn’t drop. Add up the cost for these insurance polices as over time they are likely to cost you more than any actual losses you may have on those rare times the stock drops. Trading high quality stocks you don’t mind owning over the long term is far more effective and efficient. You can find money market ETFs like ICSH that will pay about the same return without the hassle or risk.
JPST and MAFRX are up over the past two years, and ICSH is flat.
* Series I bonds * JPST, VUSB, ICSH
Yes, the broker and the account you have will make a difference in how this works. For example, I have the highest option level on a margin account, so only need to hold about 20% of the cash when opening a short put trade. If assigned then I will need to have the cash+ margin loan to pay for the stock, but my broker will give me a day or two to do this which means I could sell some stock. Some traders put money in ICSH to earn some extra interest but still have it quickly available. You may need to build up to this options account level over time. Something huge you are missing is that options are leveraged and selling short puts while holding cash aside is a way to trade the stock without actually buying the stock. Put options are far more flexible than stock as they can be rolled or adjusted. All options trades require a level of capital to be held aside as a form of collateral in case the trade loses. What is the alternative? Buying stock? If this is your view then you are missing a lot of what options offer. I actually keep 50% of my account in cash and complete uninvested as options are leveraged and this helped my account weather the covid crash in Mar. 2020 as I posted. [https://www.reddit.com/r/Optionswheel/comments/lp22xe/how\_the\_wheel\_worked\_in\_march\_during\_the\_crash/](https://www.reddit.com/r/Optionswheel/comments/lp22xe/how_the_wheel_worked_in_march_during_the_crash/)
Depending on the bond etf you use, the value could drop when interest rates rise.. I hear the FED won’t increase for another year or so but they could change their minds. So while yes, you are getting mostly interest that is beating HYSA, the value is also dropping.. just go look at BND. Bonds are pretty terrible right now, so not worth the risk for such low yields. For ultra safe, a HYSA will be best. 2nd option would be ultra short term JPST, ICSH, etc. But honestly, I would focus more on building wealth rather than trying to squeeze the highest interest rate you can on $10k emergency fund. We are talking $50 for an entire year.. minus taxes.. that’s around $3 a month. Not worth the effort. An emergency fund should be in a safe liquid spot, and should be looked at as insurance instead of an investment. I have $25k in a money market fund at my brokerage.. making .03%. Not making much, but not losing anything.. it’s there if I need it. The rest of my time and energy is focused on long term wealth building.
I prefer just being 100% in a diversified stock porfolio than holding cash or bond that have negative expected real returns. If I were to hold cash or bonds in the current environment I'd probably go for something like VUSB or ICSH.
ICSH is designed to not really move, but pay out a small dividend. Probably a little bit better than the .01% your brokerage is probably paying you!
Thoughts on or people with experience using short term bond ETFs like NEAR or ICSH in lieu of a savings account? I will of course still keep funds for emergencies, but I thought it could be a way to generate some additional money in them over a savings account (I’m with Discover).
Look at ICSH but also see what happened to the stock during the March 20 crash when everyone was running for cash . . . I tried this for a while but felt the small added pennies were not worth the hassle of having to move in and out of trades, but maybe you will find it worthwhile.
Rotate your BND into shorter term bonds so it's somewhat better than cash (barely). Consider: ICSH, MINT, JPST, GSY, NEAR and similar. When bonds get more "normal", you can rotate back to BND, BNDX or even HYG to balance things out for the non-stock part of your portfolio.
Not in a week. In the week of April 16. I'm looking at MACD and RSI indicators on the daily interval. I'm seriously thinking of closing all my positions, putting my initial investment into $ICSH so it can watch my profits make more profit from puts expiring April 9. If I've timed it right, then I'll try to convince my wife and her boyfriend to let me YOLO the $ICSH with the profits I made on puts into calls expiring April 30th.
Bonds and bond ETFs can’t hurt. ICSH, BND, TLT are 3 to look at. The big risk with these is that they will drop if the fed raises the FFR. BND is a safe bet in basically any climate, as it will gain during volatility, and the drop from interest rate risk is mitigated by partial short term holdings