RE: Am I off in my thinking? If so, ideas would be appreciated.
Personally, I don't think anyone here is "off in their thinking". Everyone is living a different situation, and each one requires a specific plan that is tailored to fit them (no pun intended).
I believe that you think ahead regarding variable dividend assets is correct. While the effect may not be in lockstep with actual Fed rate cuts, it should follow shortly thereafter. Emphasis on the word "shortly". I do not have any such assets except for monies in a money market fund awaiting deployment, and the below on, so this does not really apply to me.
I have been replacing my CDs in a taxable account with SGOV, which tracks the 0-3 month Treasury market. There are tax advantages for a person living in New York, and the current yield is just above 5.2%. For a NY resident, that is somewhat higher. SGOV is also fairly stable, as the share price trades in a tight range. It trades very close to par, on average.
When rates start declining at an accelerated pace, I intend to stretch the investment out up to the 6 month range. Slightly more risky, and there will be some additional fluctuation of the share price, but it should be manageable. |
