Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
As I prepared to transfer some of my more recent savings into a CD at Pentagon Federal Credit Union I couldn't help thinking about all those retirees that keep essentially all their savings in traditional bank products. I think most people who retired ten or more years ago were expecting at least 4% on their savings. Now it is good to get 2.02% on a 7-year CD. So retirees are finding their income from savings slashed to half of what they thought would be the lowest possible value. My Dad had an 8th grade education. He was very smart but I don't think he would have even considered putting his money anywhere other than his local bank. I keep wondering what the guy who planned on $10K from savings to survive and now has $5K is doing. I imagine he has no choice but to spend down on some of the principle.
Anyway, just musing. I don't really think anyone really can do anything about it so I guess it's better to just not care.
The way QE3 is going to help main street is by forcing people to take higher risk.
Even when mutual fund investors are withdrawing money from stock funds, they are investing more and more in riskier types of bonds as money market is paying nothing. Net net, assets from money market funds are coming out. This makes cheaper credit available to businesses.
Even if the businesses does not expand or make large investments it helps on the margins. It also helps reduce the incentive for businesses from shrinking aggressively in light of European recession and China hard landing. Keeping those people that have jobs in jobs is itself an important achievement given growing headwinds from Europe and China.
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Anyway, just musing. I don't really think anyone really can do anything about it so I guess it's better to just not care.
Even when mutual fund investors are withdrawing money from stock funds, they are investing more and more in riskier types of bonds as money market is paying nothing. Net net, assets from money market funds are coming out. This makes cheaper credit available to businesses.
Even if the businesses does not expand or make large investments it helps on the margins. It also helps reduce the incentive for businesses from shrinking aggressively in light of European recession and China hard landing. Keeping those people that have jobs in jobs is itself an important achievement given growing headwinds from Europe and China.
http://www.reuters.com/article/2012/09/20/winners-funds-mortgages-idUSL1E8KK04J20120920?type=marketsNews
how do trow price stack up
http://news.morningstar.com/articlenet/article.aspx?id=568085