Return of the King

[Sgt Pepper]

I have read several articles recently that the importance of cash as a premium asset is returning. What are others opinions?

[Rawz]

Cash is trash right now

[Muse]

Cash is trash right now

What rawz said.

[allfromacell]

Hold essentially zero cash, haven't for years, just enough to pay the bills and a tiny bit for emergencies

I've got leveraged longs in crypto just to short the dollar and get more exposure to inflationary defensive assets.

Holding cash would keep me awake at night.

[Panda-NZ-]

Fiddle with currencies if your bored.

Swap into USD, then out again based on short term trends. Better than interest.

[Muse]

Hold essentially zero cash, haven't for years, just enough to pay the bills and a tiny bit for emergencies

I've got leveraged longs in crypto just to short the dollar and get more exposure to inflationary defensive assets.

Holding cash would keep me awake at night.

Leveraged crypto doesnt?

[Sgt Pepper]

Fiddle with currencies if your bored.

Swap into USD, then out again based on short term trends. Better than interest.

How much do bank fees reduce the gain? Are all banks standard and are profits taxable?

[nztx]

How much do bank fees reduce the gain? Are all banks standard and are profits taxable?

Sounds like currency trading to me, if it becomes too much of a regular habit ;)

Suppose the bank fees are deductible directly/indirectly though :)

but hey .. the King doesn't pay that much interest these days (perhaps marginally increasing in the future
when the banks discover they want to pay a bit more for deposits)

Invisible inflation (the unreported sort - like when Grant decides to print some IOU's for the RB
to put in the bottom draw in their 10's of billions) will have decimated your real value in stock of the
King you happen to possess to just a mere 50% or less of what it bought 2-3 years ago.

Call the job, if you like - owning the bank and then raiding it of all it's readies & putting a wad of
your own IOU's back in the till ;) (Alas sooner or latter someone has to put something real back
in to replace the vast wad of IOU's or the whole job will be stuffed)

That "Someone" will probably every Kiwi around at the time that a 'Compulsary Swipe everyone's
readies' occurs to replentish the drawer & destroy some IOU's created by the fiddling Beehive
Squatters present in today's realm of the Beehive table occurs :)


Now why would anyone really want to have excessive quantities of "the King" hanging about doing
very little, earning very little, depreciating away and at further risk of further onslaughts of large
inflationary 'real value' erosion overnight, courtesy of more devious tricks from the Beehive squatters ? ;)

[allfromacell]

Leveraged crypto doesnt?

No not at all, it's nothing reckless just a way of increasing the position by 20-30%.

[Ferg]

I'm happy to sit on cash. It gives me options if I see contrary buying opportunities. Besides, if I average the return on investments + cash then it doesn't look so bad. Every $1 getting me say 9% return, is $2 I can sit on for an average return of 3%. The yields on the COVID crash investments makes that equation even better.

[JohnnyTheHorse]

Cash has outperformed the NZX50 gross index so far this year.

[Sgt Pepper]

Cash has outperformed the NZX50 gross index so far this year.

If you are approaching retirement an important factor is return OF CAPITAL not just return ON CAPITAL:).
Currently I have my nest egg invested with National Provident Fund, It has an unconditional government guarantee, has a minimum return of 4% per annum
Last year it earned 14%.. Another plus from my point of view is because it is a closed scheme you are entitled to a share of the reserves when you leave. So if the scheme reserve ratio is 10% then I get an additional 10% added to my balance on retirement
It may be boring I know, but I sleep at night:)

[nztx]

Cash has outperformed the NZX50 gross index so far this year.


How much extra cash has Robertson created & injected in the past 2 years ?

How much was on the loose before ?

That should give an idea of why property, shares & real assets have headed to the moon,
while spending power has theoretically eroded severely and interest rates are on the ground :)

A buck 2 years ago has what theoretical spending power now out of this Govt created inflation ? ;)

Available assets have increased a bit - but against massive amount of Ca$h on the loose now
there's all the unreported inflation we have seen ;)

On the other side of the coin - with wages increases etc - think you're better off ?

Think again - against that increasing costs everywhere you turn. A buck in your hand now
has had it's spending power massively eroded in just the last few years ..

Still thinking better off out of wage increases ? .. then think seriously again .. you may have been conned
because things go round & round & the increases always morph to land on those at the bottom level ;)

[Daytr]

Sgt Pepper I think potentially it could be a very smart move. There is a massive asset bubble throughout the world right now that is ripe for the popping. However markets often overstretch for a lot longer than people anticipate. I know some very smart people who cashed up prior to the crash in 08 ,unfortunately I wasn't one of them.
When I look at crypto currencies with a valuation of over $2trln, NFTs selling for $70M, the valuation of Tesla at $1.3trln, the housing market etc I get worried.
Zero interest rates will be masking a lot of risk in the world and at some point its going to blow up again & they can't just keep throwing QE at it.
2022/23 is going to be an interesting period me thinks.

[Rawz]

Just remember we are in the new age of MMT (modern monetary theory) and MONEY ISNT REAL.

Central banks just need to make sure the cash inputs are sufficient.

Max debt
Max investment

[Panda-NZ-]

The nasdaq recovered all of its losses in 3 years after the GFC.

"It's all going to be OK".

Though the aging of many societies may end the stock market gains and lead a shift into cash.
If you're 60 you're not going to invest in tech startups or companies.

[Joshuatree]

Psst I'm way over 60 and I love tech nanocaps as a smaller part of my portfolio.And,,, they are much more rewarding and last alot longer then a very short orgasm on the Melbourne cup for example.;)

[Daytr]

That's because the Nasdaq still hadn't recovered from the dotcom crash. If you look at the Dow it peaked in 2007 & took till 2013 to recover.
But the point is, how good would be to be cashed up when a crash or large correction happens.

[Daytr]

Not sure that is sustainable especially if the CBs are printing money from one crisis to the next. It just papers over the cracks until their is such an almighty crash due to extreme overvaluation of assets that no amount of QE can fix it & those exposed have to take the hit.
We are deluded if we think we have solved risk.

[iceman]

The nasdaq recovered all of its losses in 3 years after the GFC.

"It's all going to be OK".

Though the aging of many societies may end the stock market gains and lead a shift into cash.
If you're 60 you're not going to invest in tech startups or companies.



Tell that to numerous posters here that are over 60. A completely ridiculous comment !!

[Waltzing]

"If you're 60 you're not going to invest in tech startups or companies."

they will invest in growth funds as a proxy.

[kiora]

"If you're 60 you're not going to invest in tech startups or companies."

they will invest in growth funds as a proxy.

Psst, I'm in that demographic and do and why not?
Need to keep that capitol growth going!

[nztx]

Psst, I'm in that demographic and do and why not?
Need to keep that capitol growth going!


Ditto .. with you there too

[Daytr]

CPI measured 6.2% in the US Oct to Oct. The Fed may review their stance on not raising interest rates until 2023.