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The downside is that $10,000 may only be enough to buy a stick of gum in 2033.
by ericpauley 3y ago
The downside is that $10,000 may only be enough to buy a stick of gum in 2033.
- gnulinux 3y agoCorrect me if I'm wrong... If you buy an actively managed money market fund (such as VMRXX by Vanguard) when Federal interest rates go up wouldn't the return from your VMRXX assets also go up? In other words, if in 2033 a stick of gum is $10000, which implies there was high inflation between 2023 and 2033, which likely means Fed increased rates even more, wouldn't that cause your rate of return to go above 5% and therefore roughly maintain the value of your assets (assuming Fed keeps interest rates above inflation)?
- MuffinFlavored 3y agoCould you explain why somebody might do VMRXX instead of VMFXX?
- ericpauley 3y agoOnly if real rates are positive: https://fred.stlouisfed.org/series/REAINTRATREARAT10Y https://fred.stlouisfed.org/series/REAINTRATREARAT10Y