Cash parked in money markets (which is just a click away) hasn't done that badly. Getting 4-5% has kept pace with inflation for the most part. Especially now, with economic risks to the downside/slower growth arguably growing, cash doesn't look that bad (until rates are lowered, which will put investors in a pickle, and probably force them modestly out the bond duration curve). Obviously inflation (or more specifically stagflation) risks are clear grey swans as well though, so some exposure to gold (or CTA trend following, which performs well in stagflation) is probably a prudent addition to a diversified asset mix looking to protect against the known risks. And as a benefit, gold and CTA are fairly decent black swan hedges as well (but it's a bit pointless to try and protect against black swans, which are unpredictable by definition).

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ramesh31 4 days ago | parent [-]

>Cash parked in money markets (which is just a click away) hasn't done that badly. Getting 4-5% has kept pace with inflation for the most part.

This sounds good on paper until you realize that inflation numbers like core CPI are tied almost entirely to consumptive costs. For anyone saving cash with the hope of buying assets like a home at some point, you're watching that move further and further away every day. So you're left to either deal with the stress of taking part in the madness of this market, or watch your chances of ever owning anything slip away.

	▲	Fade_Dance 4 days ago \| parent [-]
		Was true during the zero interest rate era, but over the past few years since rate hikes started, the money market rate has kept up with housing. Shelter (used in the CPI readings) +5% yearly, and real median home prices ~2% compounded since rates rose. Housing affordability is at extreme historical levels, housing sales have fallen through the floor. Looks toppy. Everyone knows interest rate cuts are coming sooner or later, but historically, cutting cycles often coincide with economic slowdown and weakness that has a bigger impact than the cuts themselves. I don't think getting over 4% per year compounding is a bad place to be at all, even when looking at housing prices. Or looking at longer duration, you can get 5% for decades now. Will shelter continue rising for 5% per annum every year from here? Maybe, but it wouldn't surprise me to actually see further deceleration or even (god forbid) a tick down in some of these readings if we see some modest layoffs.