Jim and others…
I occasionally check in with good old WFC_L, which I note is down to 1238 and sports a yield over 6%. A negative real yield but not nearly as negative as cash! Problem is, share price has fallen 18% over the last 6 mo and seems like it’s a risk for falling further in the face of ongoing fed tightening. I guess this is an object lesson in one of your favorite sayings that there is nothing the same as cash.
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I had a look at it recently.
Since it was first discussed here, it has still had a slightly pleasant real total return.
About inflation plus 3.5-4.0%, which is not unreasonable given the expectations.
The problem with fixed income in the face of inflation is this:
Even if the market price holds steady, you lose real income on the coupons and you lose real value on the capital.
The $75 coupons are worth less than they were in real terms, and the relatively flat ~$1250 market price is worth less than it was.
So…it would still have been a good fixed income choice, but that’s among the range of very bad fixed income choices.
Jim
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I guess this is an object lesson in one of your favorite sayings that there is nothing the same as cash.
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In God We Trust, all others pay cash.