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October 16, 2018 5:14 pm Update

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I don’t know about you, but I am sure happy that certificate of deposits are producing higher yields these days. 💵

While 2.5 APY on a FDIC-insured 1 year CD isn’t going to make one rich, it’s a lot better then in years past. And 1-year CDs are good because they only tie up your money for a year — and lack the short-term risk of index funds and other market investments. At 2.5 APY, if you park $50k for one year, you earn $1,265 in a year guaranteed by the federal government. 🤔

The yield curve is dropping, and it’s increasingly risky to have too much market exposure for paper you can’t sit on for a decade. 📉 Sure, you’ll still losing money on certificate of deposits from inflation, but it’s not as bad as only a few years ago. While I am continuing to practice cost-averaging through my normal weekly investments, I am not going to throw wads of extra money into the market.

Tower Windows

the myth of the frugal billionaire

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Mark Zuckerberg and Warren Buffet: the myth of the frugal billionaire

“The implicit message on those kinds of stories is: ‘These people are good, therefore it’s okay for them to be so wealthy,’” said Sherman. “And what I argue in the book is that talking about any of this in that way avoids questions about distribution. Should they have $50 million to begin with, regardless of what they spend it on? That, to me, is a question that never comes up, partly because these representations of rich people as frugal or as spendthrifts is focused on their spending habits, not on what they have.”

AmEx can bar merchants from steering card customers elsewhere | Reuters

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AmEx can bar merchants from steering card customers elsewhere | Reuters

This court case came down on last Monday from the US Supreme Court, yet got very little coverage in the news media.

"A federal appeals court on Monday cleared the way for American Express Co to block merchants that accept its cards from steering customers toward lower-cost cards from other issuers. "

""The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge in Brooklyn erred in February 2015 in finding that American Express’ “anti-steering” rules violated federal antitrust law."

"Underlying the case were the fees that merchants pay to process transactions, which the U.S. government estimated at more than $50 billion a year, and which can be passed along to cardholders in the form of higher prices."

"The lower court judge, Nicholas Garaufis, had found that non-discrimination provisions (NDPs) in American Express’ merchant agreements, meant to dissuade customers from using cards from Visa and MasterCard, unreasonably restrained competition."

"But the appeals court said Garaufis erred by focusing entirely on the interests of merchants rather than cardholders who might benefit from American Express rewards programs and perceived prestige. "

Lump-Sum Investing Is the Best Strategy, Except in This Market

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Lump-Sum Investing Is the Best Strategy, Except in This Market

"The second choice always sounds the most appealing to investors, but as the old saying goes, “The market can remain irrational longer than you can remain solvent.” Holding too much cash can become an addiction for investors who don’t have a plan for deploying capital because bear markets don’t operate on a set schedule. Although the lump-sum option has the highest probability of success, the third option offers the biggest payoff from both a psychological and a market perspective in the current environment."