In this video from August 2023, Jay Martin interviews macro-economics analyst Danielle DiMartino Booth. Danielle, along with Stephanie Pomboy, are my two favorite macro-economics analysts these days. They come at things from somewhat different angles, but have come to very similar conclusions about the current economic picture.
In this recent interview above, Danielle DiMartino Booth tells us what the actual data is saying. Things are slowing down on a global level in the economy, and it's not a question of if we will have a recession, it's a question of how deep it will be and how long it will last.
That's what the actual data is telling the people who look into the data. That's what Danielle DiMartino Booth does. She actually worked at The Fed for nine years in the 2000's, into the Great Recession. Her job was to analyze the entire economy for the Dallas Fed president. Now she does the same work for private clients. Here's her website, QI Research.*
In this recent interview, near the end, Danielle explains that she, personally, doesn't have any money in stocks right now. Short term (6 month and 1 year) U.S. treasuries are paying over 5% annually, and so are money market funds. A lot of the smartest investors are putting their money in "cash" (T-bills or money market funds) right now, and just sitting on the sidelines as this recession approaches. This is what the term, "T-bill and chill" means. Park your money on the sidelines, wait and see if stocks are going to drop substantially, see if The Fed will raise interest rates one more time, or pause and hold for a while. Wait and see how the collapsing real estate market in China will affect U.S. markets. Wait and see if the struggling commercial real estate market and U.S. banking crisis plays out. By sitting on the sidelines now, with so many potential issues growing, investors can avoid potential losses in stocks, and still get a return above inflation, in treasuries or money market accounts. Then they can also be ready for any other great opportunities that may come along in the next 6 months or a year.
This next recession is the one that will wipe out a huge chunk of Generation X's retirement savings. I don't want to see that happen.
If you have money in stocks, does the "T-Bill and chill" idea make sense for you right now, with so many uncertainties in the financial world? Only you can answer that. But I wanted to throw this idea out there, for any of you that it may help. If this idea appeals to you, listen to the interview with Danielle DiMartino Booth above, and talk to the financial pros in your life, and make the best decisions for your personal situation.
* Not a paid link
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