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Posted by Yadda on May 25, 2009, 6:47 pm
I think the ~0.75% APY for most MMF's is highway robbery. But with the
banking sector a shambles what does one do to park cash? TIA, Yadda
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Posted by PeterL on May 26, 2009, 11:51 am
> I think the ~0.75% APY for most MMF's is highway robbery. But with the
> banking sector a shambles what does one do to park cash? TIA, Yadda
Why is it highway robbery? If you want to park cash for short term,
that's the rate you have to deal with. You can do a search and find
the highest MMF rates and chase after it.
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Posted by Igor Chudov on May 26, 2009, 1:03 pm
>> I think the ~0.75% APY for most MMF's is highway robbery. ?But with the
>> banking sector a shambles what does one do to park cash? ?TIA, Yadda
>
>
> Why is it highway robbery? If you want to park cash for short term,
> that's the rate you have to deal with. You can do a search and find
> the highest MMF rates and chase after it.
>
Yes, the rates on these nearly risk free assets is low. It is not
robbery that these funds are not able to pay a higher rate.
What happened is that "investors" are willing to lond money on a
"nominal risk free basis" almost for free, but demand high return for
anything that involves some degree of risk.
Historically, I parked my cash for years in the Vanguard treasury
money market fund, until the latest change in "investment climate".
Now, I park my cash in Vanguard Short-Term Investment-Grade Fund
Investor Shares, symbol VFSTX. I moved into it on 3/17/2009.
My other bond investment, which cannot be used as a cash parking
vehicle, but is another sort of fixed income investment, is Vanguard
High-Yield Corp Fund Investor shares, VWEHX, which is a junk bond
fund. We put out money into it on March 18. It has a 9.28% yield, but,
obviously, is composed ot much lower quality instruments. Since March,
we had a 12.61% gain on it already.
i
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Posted by Mike Morgan on May 29, 2009, 7:03 pm
I use G. E. Interest Plus, geinterestplus.com, which is now paying about
2.75% and has checking privileges. GE was recently downgraded by S&P to AA
from AAA, but I consider that OK.
Mike
>> I think the ~0.75% APY for most MMF's is highway robbery. But with the
>> banking sector a shambles what does one do to park cash? TIA, Yadda
>
>
> Why is it highway robbery? If you want to park cash for short term,
> that's the rate you have to deal with. You can do a search and find
> the highest MMF rates and chase after it.
>
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Posted by HW \"Skip\" Weldon on May 27, 2009, 11:09 am
>I think the ~0.75% APY for most MMF's is highway robbery. But with the
>banking sector a shambles what does one do to park cash? TIA, Yadda
With one-year Treasuries under 1% you're going to have to look
elsewhere for better yields than on liquid fixed accounts.
That's not to say that MMFs are not good, but the benefit is not yield
- it's safety.
-HW "Skip" Weldon
Columbia, SC
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