The Path Safety REIT Block is a better way to gain returns than keeping your money in cash as the yield on the Safety Block is generally a multiple of low interest-bearing checking accounts. Managing cash may seem trivial but it’s an important element of any investment strategy because the pennies add up over time.
There are rarely instances where the difference in return is so glaring than between the choice of being in cash and the next available alternative. Choosing between investing in the Russell 1000 index or the S&P 500 is essentially a coin flip of returns. Longer dated corporate bonds might yield more than short term securities, but the interest rate risk of longer dated corporate bonds may pose a threat to returns and comes with greater volatility, while the additional yield doesn’t begin to make up this gap. Even preferred securities and their blue-chip dividend paying counterparts experience extreme volatility in times like this.
The problem with leaving your money at the bank in cash is that you are not only earning nothing but also allowing someone else to use your money for their own benefit. Banks love nothing more than cash sitting in an account as this becomes part of their lending base. I’ve found that money sits in cash because of one of three reasons: people are scared, they just haven’t taken the time to invest it, or they don’t know what to do with it. While our app, Path by Origin, can’t overcome the first two problems, the third reason is a problem we’ve solved. Path allows investors to easily diversify their capital in professionally managed and designed portfolios we call REIT Blocks.
Our Safety REIT Block is made up of three exchange traded funds (ETFs) that invest in fixed income products and is our safest REIT Block. The quality of the underlying securities, the managers, and the ability to be able to buy and sell as needed make it a great alternative to cash. However, return does not come with some level of risk. During the COVID 19-related market turbulence beginning in March, the Safety REIT Block experienced short-term volatility, but bounced back quickly and the year-to-date total return through May 19, 2020 was is 1.14%.* As of May 19, 2020, the estimated current yield in the Safety REIT Block is 2.19%,** but many checking accounts have a yield of 0%, so generating a positive yield is a better investing option for most investors.
Watch this video to learn more about the Safety REIT Block:
Downloading the Path app, setting up an account and transferring money securely via Plaid, one of the most widely used platforms in the world to connect to bank accounts, takes less than thirty minutes and could yield a significant return on your time. We also make it easy to withdraw money from Path so if you have a need for the money right away, your bank account will be linked upon registration and you can wire or send it via ACH quickly and easily.
Best of all, if you are a current investor in one of Origin Investments’ private funds, you won’t pay any asset management fee to Path up to the dollar value of your private investments. For example, if you have $250,000 invested in our private funds, then the first $250,000 in Path is free.***
In uncertain times, cash is king but that doesn’t mean it has to sit in your bank account. Path was designed as a tool to help investors make smarter investment decisions and it starts with just managing cash.