An Alternative To Traditional Investing

Current Investor Options:

Money Markets/Cash: "A bank is a place where they lend you an umbrella in fair weather and ask for it back again when it begins to rain". - Robert Frost

Our View: The types of accounts covered by FDIC insurance include checking accounts, savings accounts, Money Market Deposit Accounts, and Certificates of Deposit [CDs].We believe the days of 5% interest in cash are over, and that 2-3% ROI is more likely. This makes cash less attractive. The FDIC insures deposits up to $250,000 per ownership category at each of the 4K+ FDIC insured banks – if the cash is held in a covered account.

Fixed Income Securities: "Low risk, low reward"

Our View: Treasury securities—including Treasury bills, notes, and bonds—are debt obligations issued by the U.S. Department of the Treasury; backed by the full faith and credit of the U.S. government. The current fixed-income environment is characterized by higher, but potentially falling, interest rates. The federal funds rate currently stands at 5%+, up significantly since the sub-1% rates in 2021. This environment presents both challenges and opportunities for investors.

Stocks: "The stock market is an escalator on the way up and an elevator on the way down". - Old Wall Street Saying

Our View: While the recent 2023-2024 stock market performance has been exceptional, one can typically expect about 8-9% (average return adjusted for inflation). Many (including Buffet) feel U.S. stocks are facing an overdue draw down with politics, world events, etc. impacting outcomes. The Presidential election outcome appears to be a boost for stocks, however, Goldman Sachs put out a research piece that posits the S&P 500 could return just 3% annualized over the next 10 years (just 1% after inflation). Goldman also estimates a more than 70% chance that U.S. Treasuries will beat stocks in that time frame.