Netflix just dropped Season 5 of The Crown on November 9, for
those of us who are riveted by the storied history of the British royal family.
It comes out just two months and a day after the death of Her Majesty Queen
Elizabeth II, on September 8, marking the end of her 70-year reign and ushering
in the third Carolean era; that of her son, now King Charles III. It's the
first time Britain has had a king since Elizabeth's father, King George VI,
died in February 1952.
It's an interesting coincidence, after years of historically low
interest rates not just in the United States but across the globe, that cash is
king again, too. As the Federal Reserve has raised rates to temper inflation,
it has had downstream effects for borrowers and savers alike. Borrowers have
found that the cost of servicing debt has gotten more onerous, having a cooling
effect on the economy as intended. On the flip-side, though, the dollar has
gotten considerably stronger and we're finally seeing some yield on our cash
Indeed, according to the New York Fed, the effective federal funds rate is
currently at 3.83% — up 0.75% from last month. Some larger banks, citing lack
of competition from consumers and continued surpluses of cash, have been slow
to pass those rate increases along to their account holders; others have been
more nimble. In other words, now is not a time for complacency.
Regardless of whether you've had a long-standing relationship with your bank or
credit union, it'll make sense to shop interest rates to see if you can get
your cash to work harder for you than it has in nearly a decade and a half.
In addition to comparing rates from your bank or credit union, you
can do the same thing with your investment accounts. In all of our
investment accounts (whether taxable accounts, Traditional, SEP, or Roth IRAs),
as new money is deposited or dividends and interest pay out, cash defaults to a
"core sweep" position — essentially a short-term money market fund. Most
brokerage firms — including for your accounts at oXYGen — give you multiple
options from which to choose. You may be surprised to find that you could be
earning 2-3% more on your cash than you were previously if you make a couple
quick changes to that core account.
Take a look at your own investments both within and outside of
oXYGen and have a conversation with your advisor to see what changes might help
you eke out a little more return in spite of how the markets have struggled
year-to-date. And, as always, let us know how we can continue to help you and
the people you care about.
Pond is an independent financial advisor and CFP® Practitioner at oXYGen
Financial, specializing in portfolio construction, goals-based planning, life
and long-term care insurances, and retirement plans, with 7 years' experience
in the financial services industry. He lives in Midtown, Atlanta.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.