3 ms·
> The question then is: What do you do with your cash when it’s not invested in the stock market? Assuming we put them in high caliber (“risk-free”) interest be
by howeyc 12y ago
> The question then is: What do you do with your cash when it’s not invested in the stock market? Assuming we put them in high caliber (“risk-free”) interest bearing fixed income instrument they would still give us a return on our investment while we’re out of the stock market. Based on data from various historical sources I’ll stick with an average annual geometric risk-free rate of 5%.
I must be misunderstanding this, otherwise WTF??? Tell me where I can get this risk-free 5% rate.
- dustcoin 12y agoThe author is claiming 5% is an historical average, which is plausible because in past decades, both interest rates and inflation were much higher.
- joshu 12y agoYou're not. If you find it, sign me up.
- SyneRyder 12y agoAbout a decade ago in Australia, at-call online savings accounts in Australia were getting a 6% interest rate. Nowadays that's down to 3.75% with an extra requirement to deposit $1000 every month (but still at call).