I have no doubt that they could change it in the future but I went to the text of the law - sec. 4513 (c) consideration of payments.
Very clearly states that for each month payments are suspended the months count as if the borrower made a payment towards the program.
Best of luck to you guys. The wife has 15 more payments. If this holds, still 15 months but only 9 actual payments left.
Rule of thumb for a bond fund is that the expected return is in the long term equal to the current yield. And that’s nominal, not real.
I think in the current environment there is a decent argument for substituting high yield savings or no penalty CDs for bond funds.
I hope I’m this petty when I’m sixty.
Or at least that my student loan balance will be zero.
No different than a short term treasury fund, no?
Yes but treasuries are under 1% and you can still get 1.7% for high yield savings and no penalty CDs. I think a CD ladder (staggered maturities) makes a lot of sense.
No penalty CDs as in you can pull the money out early with no penalty? Where can I get 1.7% on those?
Thats definitely a good rule of thumb for the long term return om a bond portfolio, but over shorter periods interest rate volatility will often drive bond returns. Like if interest rates jump 100 basis points in a month then bond fund returns will be negative that month.
Can the people smarter than me give me a rundown of what you think is happening in the markets right now? Dow being within 20% of ATH and up 30% or so from the lows makes little to no sense to me. Is it:
1)Nowhere else to park money
2)Buying the WH line that we are 3 weeks from “opening up” and a couple days from the peak?
3)The massive amount of stimulus from the Fed and Congress
4)???
I am moving back to 50% cash, selling all the index funds I bought at S&P 2700, 2400, and 2200. Somehow market is not even pricing in a recession now.
If I screw up and the market just keeps rising I guess I still got 10-15% gain from bottom to here but I don’t understand this rally unless it is about optimism that life will be back to normal in a month and the 10s of millions who are now laid off will be back to work, with no large scale destruction in demand and no wave of loan defaults. If that is what is driving it then I fundamentally disagree with that sentiment but I can’t see why else we’ve gone all the way up.
I don’t feel safe fully invested over a 3 day weekend with the markets closed, the chance for bad news in the short term is greater than good news, and it feels unlikely that I get a better price to risk off than what we are seeing today before the news turns bad again. Maybe the market doesn’t drop for another month or two but I don’t see a scenario where we are business as usual in the near term withou the virus flaring up again.
Massive amount of stimulus is main driver. Fed just did another $2.1 trillion today.
Who knew economies were this easy.
But yeah, f it. Switching from 95/5 stocks to 50% stocks and 50% to a stable value fund that seems to offer a decent return (about 2.4% historically but assume somewhere in the 1-2% range now).
Anyone have any idea for a guesstimate of what this thing returns now?:
Sounds right but if so then it is really a delayed reaction to many of the fed actions which is not normally how the market works in those cases.
Because of stimulus there’s not just more money, it’s in different places. Where it goes matters. Of course limits on what you can do with the money matter as well. But yeah, adding money doesn’t automatically and instantly add wealth to the world as a whole. Seems like deflation is a bigger concern now than inflation, so I would worry about that.
This is what I dont get about the way the markets are reacting to all this. Printing tons of money and injecting it to businesses to keep them afloat is great and all but even the most optimistic estimates have us somewhat opening up in a month and then going through probably a minimum of 12 months more of this having an impact on a lot of areas of the economy.
Many businesses have no demand and have to lay off workers and stop buying the materials they need to produce them.
Suppliers have the same problems with the same results.
Workers cant pay rent, the landlords cant pay their mortgages, etc.
As a result the banks get put under a huge strain as almost none of their assets are performing near expectations.
Throwing money at it doesn’t really solve those problems for a lot of industries unless you plan to do it over and over for a long period of time. Maybe that is the plan who knows.
Nobody knows anything.
You know that arcade game where you get grabbed by the bad guy have to escape via filling the continually draining stamina bar by mashing the button as fast as you possibly can? If the timer runs out before you fill the bar, you die.
The world’s fingers are starting to get really tired.
The past due bills are only just starting to be printed right now.
Well the head of the Fed is essentially a Trump lackey.