The Washington Post recently published some interesting comments quoted from Mary Shapiro who just happens to be the Chairman of the Securities and Exchange Commission (SEC). Many people park funds in these Moneymarket accounts believing that they are both Safe and Liquid.
Just how Safe are they?
Remember What happened in 2008 when Primary Reserve Fund share prices fell below $1.00
you could Google it or search newspaper archives. Students of history suggest that History repeats itself
Mary was quoted as saying - investors "have been given a false sense of security"
"Funds remain vulnerable to the reality that a single moneymarket fund fund breaking the buck could trigger a broad and destabilizing run"
She went on to say that in a crunch investors may face limits on withdrawals
I am not telling anyone to buy or not to buy these products.
I just found the comments by Mary to be extremely interesting and maybe even a little bit unsettling!
What do you think??
There are financial products available that have no market risk. There are other financial products that include various amounts of market risk. Understand what you are buying! Everyone needs to understand the diference between what I like to call Safe Money and Risk Money. For most people there needs to be a combination of both! What is your comfort level between the two?
I believe it was Wil Rogers the intellectual cowboy who once said "I'm more concerned with the return of my money, than the return on my money"
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