Posted: 11/14/2007 8:39:52 PM EDT
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this is a money market MUTUAL fund right? not a money market deposit account? the later would be FDIC insured, and this .96 cents on the dollar bullshit wouldn't be happening? i imagine this is going to confuse/concern many people who don't immediately realize that there's a difference. a big surprise for people waking up this morning. kind of makes you wonder what their intentions are of reporting it in way they are? possibility they're trying to fuel some sort of panic in order to garner support for a bailout? |
...But only "guaranteed" to the point the firm is willing and or able to throw money at their product so it doesn't fall below a dollar per share. They are not FDIC insured. |
Reading the fine print is sort of important in investing. |
You only "take a hit" when you sell. I cheer when I see the S&P500 turn down... that means my next IRA contribution buys more shares, and when the market goes back up my IRA is worth that much more. Obviously, when you're within ten years or so of retirement, you can't weather long-term dontrends any more, and should be shifting a chunk of your holdings to safer, more stable investments. But few things make me scream like a 30- or 40-something moaning, "Oh, the market went south, so I had to sell and I took a huge hit!" Idiot. |
+1. That is not a "money market fund." They tried to run a bond fund, with a little more risk than a money market fund, in order to achieve better returns than a money market fund, and are now taking the hit for that. edited regarding the FDIC issue. The FDIC, as far as I recall, insures accounts, not specific investments. And those accounts have to be with a FDIC insured institution, such as your typical bank. And the FDIC does not insure against market loss - only loss through fraud, robbery, bank going under, etc. Securities firms carry a different, private insurance, but those accounts are insured all the same. And the coverage is typically much higher than the FDIC provides. |
well, I'll be a SOB  I sacrifice and work my ass off, the money I was saving to buy a home was in a money market account, I switched it all over to my checking account when I finally bought my home the teller at the bank looks at me weeks later at the remaining balace in my checking and says "do you know your money isn't in an interest drawing account?" would you like to start a MMA? I have been very busy and said I may do it in the future but crapola, stocks cannot make me money, house values are down equaling (I fail), and now this my money is better off in a mattress.I have no doubts that all will be well in time but right at the moment it looks like everything took it's time to go bad all at once, like trying to find someone to work during hunting season  ETA oops this was the bond fund not the bank. well guess all isn't gloomy 
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You should have known it was not risk free. Unless it's FDIC insured, there is always a risk of loss of capital. When I bought in to those I had to sign 2 different forms that very clearly said the capital was at risk and not insured. The agent also said it twice. Recently I opened an FDIC insured MM account and I asked the agent to show me where in the paper work it said it my capital was insured. That's why the yeild is lower. You want higher yeild, then you have to take more risk. GM has been a shitty company for a long time. |
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http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/NoShelterFromTheHousingStorm.aspx Contrarian Chronicles11/19/2007 12:01 AM ET No shelter from the housing storm Money-market funds aren't looking like an investor safe haven from Wall Street's credit crisis after all. Meanwhile, a judge's ruling gives home lending another reason to seize up. For any folks out there still branding our credit problems "contained," Mr. Money Market has one word for them: not. In one of the first instances that I am aware of, General Electric (GE, news, msgs) announced last week that it was going to "break the buck" on its Asset Management money-market fund, a nearly unprecedented event. To do that instead of shoring up the fund, one wonders: How bad does GE think things are going to get? Writer Andrew Bary, on Barron's Online on Wednesday, reported that the fund has "suffered losses in mortgage- and asset-backed securities and is offering investors the option to redeem their holdings at 96 cents on the dollar." The risk in money funds is a theme I've been noting for a while. Regular readers might recall my cautionary comment in August: "As we get further down the road, I think we'll discover that some money-market funds owned commercial paper issued by a conduit whose assets may not be up to snuff. So folks with a lot of assets in money-market funds might want to double-check that they know what's in them." Treasury-only money markets are the way to go. This brings me to last Tuesday, when Legg Mason (LM, news, msgs) said it would add $100 million to one of its money funds and provide $238 million in credit for two others. The 10 largest managers of U.S. money funds have a good deal of special-investment-vehicle debt, some of which was issued by Cheyne Capital Management, which has already defaulted due to losses from securities linked to subprime mortgages. Then more financial institutions announced money-market problems Wednesday, not least of which was GE. That day, a New York Times story headlined "Investor safe haven has become a concern," cited issues at Legg Mason, SunTrust Banks (STI, news, msgs) and Wachovia (WB, news, msgs), which have stepped in to make sure their money funds don't break the buck. |
CORRECT! I guess back when the market took a shit around 2000, a bunch of money market funds were taking serious losses. I think all of the big investment firms covered those loses OUT OF THEIR OWN pocket to prevent a ton of pissed off investors. RF |