Interim Cash Management Commentary 3/19/20

On Sunday evening of this week, the markets experienced a brief dip into negative yields for the 3-month US Treasury bill. Once again on Wednesday, bills with maturities from four weeks to three months were slightly negative. In other words, investors were willing to pay the US Treasury to hold their money for the next one to three months. It’s possible that we’re coming to a time when you will put money in your local bank and receive fewer dollars when you later withdraw it.

That makes short-term cash management a very difficult proposition for individuals and investment managers alike. Over the past 35 years, we have wrestled with a number of difficult environments for cash management, none more difficult than today’s. Fortunately, for cash that is not expected to be needed in the foreseeable future, we have invested funds in certificates of deposit (CDs) with yields far above today’s meager rates. For CDs with maturities longer than one year, we have negotiated minimal withdrawal penalties, so we retain the option of redeeming the money before maturity should better opportunities present themselves. For assets that might need to be withdrawn, we monitor daily the relative attractiveness of Treasury bills, US Treasury money market funds and Mission’s Insured Deposit Program. We expect that ongoing diligent evaluation of each of our alternatives on a nationwide basis will continue to provide clients with the highest available returns in government- guaranteed instruments.

By Thomas J. Feeney, Chief Investment Officer

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