Vanguard is making a few changes to their Vanguard Prime Money Market Fund, which is often their highest-yielding option: Name change. Vanguard Prime Money Market Fund will change its name to Vanguard Cash Reserves Federal Money Market Fund. Even safer. It will now invest only in securities fully backed by the U.S. government or cash. I believe that they used to invest in some highly-rated short-term commercial paper. Even cheaper. Basically, everyone will get the lower expense ratio from Admiral shares which previously had a $5,000,000 minimum (!). The minimum investment to get started is still $3,000. No more checkwriting. You can still get checkwriting with certain other funds, including the Vanguard Federal Money Market Fund. The actionable event here is that … [Read More...]

Schwab has rolled out a new digital financial planning tool called Schwab Plan. They claim it to be a simplified version of the same financial planning software used by many human financial advisors. From their press release: Schwab Plan is a digital self-guided financial plan available through Schwab.com that helps investors build a personalized plan that includes a range of factors such as desired retirement age, retirement goals, social security expectations, portfolio risk profile and asset allocation, and various income sources. […] they are able to generate a retirement plan that shows retirement goals and probability of funding those goals, a comparison of an individual’s current asset allocation to a recommended allocation based on plan inputs, and suggested next steps to get and stay … [Read More...]

A lot of investment “analysis” is simply finding a reasonable and convincing way to explain present market prices. Whatever the price is, you can find a story to match. Working backwards like that means there usually isn’t much useful nor actionable information. I say this before I link to the recent Vanguard article Why equity markets have recovered, mainly for this chart of what they see as a “fair value” for CAPE (cyclically-adjusted PE) or PE10 (price/average earnings over last 10 years): Vanguard’s U.S. fair value CAPE framework is based on a statistical model that corrects measures of cyclically adjusted price-to-earnings ratios for the level of inflation expectations and for interest rates. The statistical model specification is a three-variable … [Read More...]

Financial institutions increasingly want all of your money under one roof. Brokerage firms and robo-advisors are adding savings accounts and debit cards. Banks want to let you trade stocks. If you have built up some sizeable assets, you can make extra money when they decide to pay you to move over your assets. Try them out, see if you like them, and move again if you need to. The self-directed brokerage arm for Chase is You Invest, and they are currently offering up the following transfer bonuses: $200 with $25,000-$99,999 in qualifying new money $350 with $100,000–$249,999 in qualifying new money $725 with $250,000+ in qualifying new money The cash bonus applies to any new You Invest Trade account (Brokerage, Traditional IRA, … [Read More...]

Transfer offer is back again. My favorite option in the now-crowded “robo-advisor” category is technically not a registered advisor at all, it is M1 Finance. Here’s a quick rundown of what makes them different: Fully customizable. You pick your own target asset allocation “pie”. (You can add ETFs or individual stocks.) You can simply copy one of the many model portfolios out there, or customize it as you like. You have full control! M1 handles the boring stuff, like rebalancing or dividing a $100 contribution across 8 different ETFs. Here is my pie which I named the My Money Blog Portfolio. No commissions. Free stock/ETF trades with a low $100 minimum account size for taxable accounts and a $500 minimum for… [Read More...]

Here’s my monthly roundup of the best interest rates on cash for September 2020, roughly sorted from shortest to longest maturities. I track these rates because I keep 12 months of expenses as a cash cushion and also invest in longer-term CDs (often at lesser-known credit unions) when they yield more than bonds. Check out my Ultimate Rate-Chaser Calculator to see how much extra interest you’d earn by moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 9/9/2020. High-yield savings accounts While the huge megabanks still pay nearly zero, it’s easy to open a new “piggy-back” savings account and simply move some funds over from your existing checking account. The interest rates on savings accounts … [Read More...]