So the markets has been doing the usual jig saw. It is clearly in swing mode .. from the start of this year it has fallen down by more than 5% points and back up few times now .. It has been doing that for a while now. The general feel is new highs are being tested and likely the only way to go up from here is down. But we all have seen that being told multiple times. So what to do ? I guess maybe buy some and hold. Only in safe stocks such as utility etc. All of them are high at the moment. Speaking of highs, Apple did fall quite a bit and lost its most valuable company tag for a bit. But overall, still it is high. The market analysts started clammering around the 10 p/e statistical measure as if that alone determines the worth of a company and market. Not us. We do not recommend Apple as of now even if berkshire h buys a position in it. Just hold off for the moment. These things have a way of working yourself out.
Meanwhile, one suggestion that no one seems to be giving is about the role of safe instruments such as CDs and MMAs and online savings. There is Discover, Amex, Barclays, credit unions such as Air force, Nasa, Navy FEDCU, Penfed, Alliant, Ally Bank and really any local credit unions, big yet stingy banks such as Bank of America, Citi and Chase; online only banks such as Capital one among others. A simple query to bankrate.com and similar sites such as smart asset gives you an idea of what all banks and rates are out there. And it is easy to check out the local banks - takes about an hour in an afternoon to check them out and put them in an excel based on which banks are near you and you comfortable with the site/technology and people among other things. I for one, really like the big banks such as Chase and have good experience with their call centers in India. Ditto with the Citi bank and Bank of America. There have been some US based banks and local call centers who tried to give some attitude and have promptly shafted them and severed relationship with them. So do not discount the human aspect in this banking relationship and go beyond just a simple app to what the wide array of features are out there with the various banks. Given that there is no super flash crash expected in coming few months, I thought it will be good to move some money to the online savings or CD accounts. Not only will they earn full 1% instead of the 0.1% currently but there is a good chance that with increasing interest rates, this will go up and set up the portfolio quite well for an eventual fall of the stock market.
