Home › Forums › Financial Markets/Economics › Where is the best place to put my money?
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andymajumder.
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July 27, 2010 at 2:33 PM #584251July 27, 2010 at 2:38 PM #583217
UCGal
Participant[quote=walterwhite]i dont know; those money market funds are kinda risky in a meltdown. maybe just put it in fdic bank not likely to fail.[/quote]
There are money market funds and money market bank accounts. My understanding (which could be wrong) – if the money market account is through an FDIC insured bank – it’s a savings account with FDIC insured up to $250k. If it’s through a brokerage account it’s “insured” under SIPC… which will cover the asset – but not the value of the asset… a MMF is typically $1/share. So if you have $100 in it, you have 100 shares. SIPC would guarantee you that if your brokerage account went tits up you’d get your 100 shares. It does NOT guarantee the price per share… so if the underlying fund goes broke, you’d be broke.
There was a big deal in 2008 about 2 MMFs “breaking the buck” – meaning their shares dropped to less than $1. For a while the treasury backed the value of the money market funds – but that expired a while back.
Breaking the buck is very rare. But it *can* happen.
July 27, 2010 at 2:38 PM #583309UCGal
Participant[quote=walterwhite]i dont know; those money market funds are kinda risky in a meltdown. maybe just put it in fdic bank not likely to fail.[/quote]
There are money market funds and money market bank accounts. My understanding (which could be wrong) – if the money market account is through an FDIC insured bank – it’s a savings account with FDIC insured up to $250k. If it’s through a brokerage account it’s “insured” under SIPC… which will cover the asset – but not the value of the asset… a MMF is typically $1/share. So if you have $100 in it, you have 100 shares. SIPC would guarantee you that if your brokerage account went tits up you’d get your 100 shares. It does NOT guarantee the price per share… so if the underlying fund goes broke, you’d be broke.
There was a big deal in 2008 about 2 MMFs “breaking the buck” – meaning their shares dropped to less than $1. For a while the treasury backed the value of the money market funds – but that expired a while back.
Breaking the buck is very rare. But it *can* happen.
July 27, 2010 at 2:38 PM #583845UCGal
Participant[quote=walterwhite]i dont know; those money market funds are kinda risky in a meltdown. maybe just put it in fdic bank not likely to fail.[/quote]
There are money market funds and money market bank accounts. My understanding (which could be wrong) – if the money market account is through an FDIC insured bank – it’s a savings account with FDIC insured up to $250k. If it’s through a brokerage account it’s “insured” under SIPC… which will cover the asset – but not the value of the asset… a MMF is typically $1/share. So if you have $100 in it, you have 100 shares. SIPC would guarantee you that if your brokerage account went tits up you’d get your 100 shares. It does NOT guarantee the price per share… so if the underlying fund goes broke, you’d be broke.
There was a big deal in 2008 about 2 MMFs “breaking the buck” – meaning their shares dropped to less than $1. For a while the treasury backed the value of the money market funds – but that expired a while back.
Breaking the buck is very rare. But it *can* happen.
July 27, 2010 at 2:38 PM #583952UCGal
Participant[quote=walterwhite]i dont know; those money market funds are kinda risky in a meltdown. maybe just put it in fdic bank not likely to fail.[/quote]
There are money market funds and money market bank accounts. My understanding (which could be wrong) – if the money market account is through an FDIC insured bank – it’s a savings account with FDIC insured up to $250k. If it’s through a brokerage account it’s “insured” under SIPC… which will cover the asset – but not the value of the asset… a MMF is typically $1/share. So if you have $100 in it, you have 100 shares. SIPC would guarantee you that if your brokerage account went tits up you’d get your 100 shares. It does NOT guarantee the price per share… so if the underlying fund goes broke, you’d be broke.
There was a big deal in 2008 about 2 MMFs “breaking the buck” – meaning their shares dropped to less than $1. For a while the treasury backed the value of the money market funds – but that expired a while back.
Breaking the buck is very rare. But it *can* happen.
July 27, 2010 at 2:38 PM #584256UCGal
Participant[quote=walterwhite]i dont know; those money market funds are kinda risky in a meltdown. maybe just put it in fdic bank not likely to fail.[/quote]
There are money market funds and money market bank accounts. My understanding (which could be wrong) – if the money market account is through an FDIC insured bank – it’s a savings account with FDIC insured up to $250k. If it’s through a brokerage account it’s “insured” under SIPC… which will cover the asset – but not the value of the asset… a MMF is typically $1/share. So if you have $100 in it, you have 100 shares. SIPC would guarantee you that if your brokerage account went tits up you’d get your 100 shares. It does NOT guarantee the price per share… so if the underlying fund goes broke, you’d be broke.
There was a big deal in 2008 about 2 MMFs “breaking the buck” – meaning their shares dropped to less than $1. For a while the treasury backed the value of the money market funds – but that expired a while back.
Breaking the buck is very rare. But it *can* happen.
July 27, 2010 at 4:03 PM #583242EconProf
ParticipantThe comments about low interest rates to savers are sadly true. This is part of the tragic fallout of the current Fed policy to help the big banks rebuild their balance sheets while hurting savers.
The best return for most people is to pay off any debt. Credit cards that charge you, say, 12% should never have a running balance. By paying the bill off, you implicitly are earning a 12% rate of return. OTOH, I’d guess you are already doing this.July 27, 2010 at 4:03 PM #583334EconProf
ParticipantThe comments about low interest rates to savers are sadly true. This is part of the tragic fallout of the current Fed policy to help the big banks rebuild their balance sheets while hurting savers.
The best return for most people is to pay off any debt. Credit cards that charge you, say, 12% should never have a running balance. By paying the bill off, you implicitly are earning a 12% rate of return. OTOH, I’d guess you are already doing this.July 27, 2010 at 4:03 PM #583870EconProf
ParticipantThe comments about low interest rates to savers are sadly true. This is part of the tragic fallout of the current Fed policy to help the big banks rebuild their balance sheets while hurting savers.
The best return for most people is to pay off any debt. Credit cards that charge you, say, 12% should never have a running balance. By paying the bill off, you implicitly are earning a 12% rate of return. OTOH, I’d guess you are already doing this.July 27, 2010 at 4:03 PM #583977EconProf
ParticipantThe comments about low interest rates to savers are sadly true. This is part of the tragic fallout of the current Fed policy to help the big banks rebuild their balance sheets while hurting savers.
The best return for most people is to pay off any debt. Credit cards that charge you, say, 12% should never have a running balance. By paying the bill off, you implicitly are earning a 12% rate of return. OTOH, I’d guess you are already doing this.July 27, 2010 at 4:03 PM #584282EconProf
ParticipantThe comments about low interest rates to savers are sadly true. This is part of the tragic fallout of the current Fed policy to help the big banks rebuild their balance sheets while hurting savers.
The best return for most people is to pay off any debt. Credit cards that charge you, say, 12% should never have a running balance. By paying the bill off, you implicitly are earning a 12% rate of return. OTOH, I’d guess you are already doing this.July 27, 2010 at 4:42 PM #583256lepetitangel
ParticipantHi All
Thanks for the advice. That’s exactly how I feel…it’s risky to put it either in stock or housing market…so my only risk-free bet is in bank…earning less than 1% yield.
Would you recommend buying bonds or gold or other forms of investment?
I’ve made money but also lost money in the stock market…and that’s why I figure the whole thing is a big scam. There’s a reason why Wall Street people are rich…cuz they’re robbing retail investors like me. I’m lucky enough to just get my money back I think.
Okay…I guess I’ll just be happy and keep the money in bank for now.
July 27, 2010 at 4:42 PM #583348lepetitangel
ParticipantHi All
Thanks for the advice. That’s exactly how I feel…it’s risky to put it either in stock or housing market…so my only risk-free bet is in bank…earning less than 1% yield.
Would you recommend buying bonds or gold or other forms of investment?
I’ve made money but also lost money in the stock market…and that’s why I figure the whole thing is a big scam. There’s a reason why Wall Street people are rich…cuz they’re robbing retail investors like me. I’m lucky enough to just get my money back I think.
Okay…I guess I’ll just be happy and keep the money in bank for now.
July 27, 2010 at 4:42 PM #583882lepetitangel
ParticipantHi All
Thanks for the advice. That’s exactly how I feel…it’s risky to put it either in stock or housing market…so my only risk-free bet is in bank…earning less than 1% yield.
Would you recommend buying bonds or gold or other forms of investment?
I’ve made money but also lost money in the stock market…and that’s why I figure the whole thing is a big scam. There’s a reason why Wall Street people are rich…cuz they’re robbing retail investors like me. I’m lucky enough to just get my money back I think.
Okay…I guess I’ll just be happy and keep the money in bank for now.
July 27, 2010 at 4:42 PM #583991lepetitangel
ParticipantHi All
Thanks for the advice. That’s exactly how I feel…it’s risky to put it either in stock or housing market…so my only risk-free bet is in bank…earning less than 1% yield.
Would you recommend buying bonds or gold or other forms of investment?
I’ve made money but also lost money in the stock market…and that’s why I figure the whole thing is a big scam. There’s a reason why Wall Street people are rich…cuz they’re robbing retail investors like me. I’m lucky enough to just get my money back I think.
Okay…I guess I’ll just be happy and keep the money in bank for now.
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