It's A Confidence Game
For safety, make sure that you're invested in a true money market fund. Just ask your broker or fund sponsor whether the fund is registered with the SEC under the Investment Company Act's Rule 2a-7.
The rules require such funds to (1) buy high-quality securities; (2) no more than 5% may be in any single issuer (except government); and (3) the weighted average maturity must be no more than ninety (90) days.
Your safest approach is to use a money market fund operated by a major financial firm because a major firm will have both the ability as well as the incentive to keep the value of their money fund shares at $1 - even if they suffer losses.
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The rules require such funds to (1) buy high-quality securities; (2) no more than 5% may be in any single issuer (except government); and (3) the weighted average maturity must be no more than ninety (90) days.
Your safest approach is to use a money market fund operated by a major financial firm because a major firm will have both the ability as well as the incentive to keep the value of their money fund shares at $1 - even if they suffer losses.
* * * * *
posted by Bob Moser at
6:00 PM
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