The Mountain of Cash

The stock rally Wednesday has moved a re-buy of US stocks off the front burner for Krypto Fund. What now?

I wait. I sell when prices are high and buy when they are low. That applies to EVERY asset class. Over the past few months I sold all my TIPS and large amounts of US stocks and all classes of foreign stocks and even gold stocks, as those asset classes rose in value. The money all went to cash - money market funds. The model wants me to buy fixed income bonds, BUT those are in bubble stage, too.

Hence my wait. Waiting even a couple years can pay off quickly. For example, the prices of bonds can easily fall 10% from here, yet the coupons are in the 4% range. Avoiding a 10% or more fall gives a great 2.5 year payback on the cost of waiting (viz., foregoing the 4% yield).

A possible buy looms: the recent large drops in both municipal bonds and 30 year US treasury bonds brings both those asset classes closer to a buy point - 5%. That's my long term investment minimum goal. Why buy bonds that yield less than that & lock in a losing investment? Just wait. The buys will come, maybe later this year if the economy begins the faster growth as I expect.

Waiting and sitting can pay well. Patience, grasshopper.

Word of the Day

"Antinomy" noun [$10]
Antinomy means 1. a contradiction between two beliefs or conclusions that are in themseles reasonable; a paradox; 2. a conflict between two laws of authorities.
Sentence: For investing, the antinomy of buy and sell both being bad choices is resolved by wait - doing nothing. Let time and volatility provide a better investment action.