3 replies to this topic

[dasein]

theres been a lot of discussion and "mama says" lately about MMFs and cash. To simplify in case someone really wants to find out - If you want to know what your MMF is invested in, dont bother to ask a broker or to this him/her about what they say, a money market fund is a fund, and all you need to do is read the prospectus and the semiannual report. the prospectus will tell you that they endeavor to maintain par value at 1, but they do not guarantee it - period. the prospectus will tell you their objective, such as government backed paper, but look at the annual and you will probably see a lot of FNMA and GNMA if it isnt a Treasury fund. See whether its guaranteed by the FDIC, at best up to 100K or so only, after that you are on your own. after that, if they dont have a Treasury MM fund and you are worried - not a bad idea probably - bite the bullet and keep your cash in cash at .95% or dont, spread it around so its all FDIC insured or dont - but dont whine. If you have enough cash, or arent going to be trading it for a while, you can ask your broker to buy a TBill - marginable - or put it into the STTreas ETF that someone mentioned, or maybe the dollar or JPY ETF, for example - but again, these ETFs are usually constructed via derivs, so who knows what might happen to them. This is serious stuff, and everyone here acts like an adult with their trades, so why act different when it comes to cash? klh PS my broker is relenting a bit, trying not to admit their rep(s) was(were) possibly negligent about my transfer. I am in cash, but hoping they will let me move to Treasury, which is the reason I moved some other Treasury MM funds to them (thinking I could keep them that way, "in kind").

[ogm]

Nah, let them talk.. this is real fear manifesting itself. And at the same time they are all saying that some indicator somewhere isn't oversold enough, and that means there is no fear in the market

Edited by ogm, 15 August 2007 - 05:38 PM.

[skyymaster]

theres been a lot of discussion and "mama says" lately about MMFs and cash.

To simplify in case someone really wants to find out - If you want to know what your MMF is invested in, dont bother to ask a broker or to this him/her about what they say, a money market fund is a fund, and all you need to do is read the prospectus and the semiannual report.

the prospectus will tell you that they endeavor to maintain par value at 1, but they do not guarantee it - period.
the prospectus will tell you their objective, such as government backed paper, but look at the annual and you will probably see a lot of FNMA and GNMA if it isnt a Treasury fund.

See whether its guaranteed by the FDIC, at best up to 100K or so only, after that you are on your own.

after that, if they dont have a Treasury MM fund and you are worried - not a bad idea probably - bite the bullet and keep your cash in cash at .95% or dont, spread it around so its all FDIC insured or dont - but dont whine.

If you have enough cash, or arent going to be trading it for a while, you can ask your broker to buy a TBill - marginable - or put it into the STTreas ETF that someone mentioned, or maybe the dollar or JPY ETF, for example - but again, these ETFs are usually constructed via derivs, so who knows what might happen to them.

This is serious stuff, and everyone here acts like an adult with their trades, so why act different when it comes to cash?

klh

PS my broker is relenting a bit, trying not to admit their rep(s) was(were) possibly negligent about my transfer. I am in cash, but hoping they will let me move to Treasury, which is the reason I moved some other Treasury MM funds to them (thinking I could keep them that way, "in kind").

What do you do when it is not a option in 401k to buy core cash? When all the choices are MM with risk disclaimer?

[Drano]

Are there any U.S. bond funds available to you?