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How high do CD rates have to go to entice you to pull money out of equities?

Right now, I see several banks offering 5-year CDs with APY at 3%+. That's not quite high enough for me to pull money out of equities, but I'm starting to look hard at the extra cash that I have sitting in my brokerage accounts that I was saving as dry powder.  At 4%, I think I would start pulling a little money out of equities, and at 5%+, I think I would target around 20%+ in CDs, though I think I would ramp that up over time as opposed to all at once.
I'm sort of happy that people can earn somewhat decent returns from CDs now, but I wonder what effects that will have on equity (and bond) markets?
4% to 5% for a five year cd would be nice in lieu of 10 year bonds and could replace some dividend paying equities where I want to reduce risk.

I do think equity price and participation has been Increased due to low rates, and price may be impacted when volume shifts as rates rise.
I favor an idea similar to Nate_R's for using CD instead of Bonds when CD return becomes high enough - but instead of substituting Treasury or high-grade investment (AAA), I'd probably substitute lower-tier investment grade. With a high-enough risk-free rate, the premium for taking credit risk with lower-tier investment grade wouldn't be worthwhile. Also, if the CD has a flexible early-termination penalty (I think some CDs are charging as low as 60-days of interest) - that'd be a great advantage compared to Bonds as the latter may lead to principal loss in secondary market trading due to a variety of reasons (rate continues to rise, bid-ask spread, etc.).
At 4.5% I'd move 10% to CDs and at 5% I'd add another 10%.   Remember the days when you could get 7% CDs? 
The rates would not impact me that way. 
I start with an asset allocation plan: so much in equities; so much in fixed income.  I would pull some money out of equities if they went up further.  I would add money to equities if they went down further.
I have money in CDs already, mainly a planned amount in a couple of 5-year CD ladders.  However, I also have some shorter term CDs as an alternative to money market funds.
I agree with Roamer.  I also already have a portion is a CD ladder but am wondering why Fidelity does not match the competitive rates of many banks.  it is befuddling for Fidelity not to maintain the highest returns for their clients to choose from
Been buying <2 year CD's for quite awhile. US equities r ~50% of overall portfolio and will be as long as I am around. I still think US equities r good bet for the long run.buy a boat and drink cold beer. stay the course
(11-21-2018, 02:34 PM)Jeromedawg Wrote: Been buying <2 year CD's for quite awhile. US equities r ~50% of overall portfolio and will be as long as I am around. I still think US equities r good bet for the long run.buy a boat and drink cold beer. stay the course

<2 year CD's are a good place to diversify your FI portion - not for the net yield- after inflation there is none- for capital preservation. 50 in Equities and 50 in short term CD's is not a bad allocation for those in or near retirement.  You can tilt the mix more to equities if they pull back and if CD's or Bonds move higher to the levels many have discussed here you can move more to CD or individual bonds and longer terms.
I think for the time being bond funds are a bad idea and would not touch them.
I have used a similar idea with laddering and yesterday rolled a portion 1yr @ 2.45 and 2yr @2.8 more maturities in Dec, Jan etc will get rolled as well.
My 35% position in CD's is short term, 1 year or less.
With the Trade War in place and equities declining, that percent increases due to the falling equities.
Pulling money out of the Market is not currently in the plans but you raise an interesting point.
At some stage, the Market becomes the second or third option if there are no buyers.
Longer term advantages of being invested did not hold up during the '70's which I remember quite well.
I think many of us have been extremely fortunate to have started careers at the end of that time rather than earlier.
It may also have clouded our expectations and outlook for the Market to continue it's climb.
And of course the advice to continue with equities compounds the desire to make profits.
The question becomes whether to drop out of the game and sit on the sidelines.
We are overdue for more than a correction.
We held (not paid) a mortgage at 17%.
Those days are long gone. But is that an idea for you guys?

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