💰 HOW’S YOUR DOUGH? INTEREST MATTERS! 💸

Investing

• The Wall Street Journal recently confirmed what we blogged a few months ago:

• Your association forfeits yield by storing funds in ‘traditional’ bank accounts

• Complacency (allowing your funds to remain in money market funds instead of investing in brokered CDs, Treasuries, etc. ) earns materially less yield

Banks Are Offering 4.5% CDs—Just Not to Regular Customers

• …Banks are selectively raising interest rates on deposits following the Federal Reserve’s steep rate increases this year. Many are paying their best rates on so-called brokered CDs…

– Banks Are Offering 4.5% CDs—Just Not to Regular Customers – WSJ 10/24

You're Giving Away Yield and Don't Even Know It

• …At the end of 2021, not a single U.S. money-market fund was charging more than 0.18% in annual expenses, according to Crane Data, a firm in Westborough, Mass., that monitors money-market funds and other cash investments.

As of Sept. 30, 210 money funds—fully one-fourth of the total—were charging at least 0.5% in annual expenses, according to Crane. Nearly two dozen weighed in at 1% or more.

That helps explain why, with one-month Treasury bills and commercial paper yielding about 3.2% this week, the average money fund yielded just under 2.8%...

…Money funds with higher fees are likely to have lower net returns; every penny the manager takes out is one penny less for you. Those with annual expenses of at least 0.5% yield an average of 2.18%, versus 2.76% for the 100 largest money market funds….

– You're Giving Away Yield and Don't Even Know It – WSJ 10/21

Learning Curve

• Janet Yellen's Learning Curve from WSJ’s The Saturday Essay provides lessons we should all take to heart as we work in our communities. History is critically important so that we can learn from the past to understand where we're going, but we should not assume that history will repeat itself. We need to remain alert and always perform appropriate due diligence.

• What lessons has she drawn from more than two decades in Washington? “The facts on the ground are constantly changing. History isn’t just repeating itself all of the time,” she said. “You have to remain alert to really understanding the facts on the ground and what makes a particular episode different than what you’ve encountered in the past.”