Replies to post #131 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi K, Excellent way of viewing what the Cash Reserve actually does! Thanks.

It's the Cash's latent purchasing power that has the real value. The interest it earns is gravy on the real meat and potatoes.

If we view the Value Line "Average Dividend Yield" for all stocks in their 1700 grouping we see that it isn't much different from Money Market Rates right now. This is a very unusual circumstance. It's current reading is 1.8% I believe. Well, you could own all those stocks and have your money at risk for the same yield that the MMF is giving you for nearly no risk.

Again, every time that money is put to work, it returns us a very healthy profit well in excess of what the interest on the cash does.

Thanks for the excellent reminder.

Tom

[JSLyons]

Tks, Karel. That puts things in perspective. Afterall, there are many different ways of earning a 'return' on capital.
Good to see you over here at I-Hub.

Best rgds,
Jonathan