Money Maket Funds Not Safe?

[The_Lillard_King]

Money market funds have been among the few places that investors could put their cash and sleep peacefully. At the moment, that is not necessarily true.

On Tuesday, the Reserve Primary Fund, a giant money market fund whose parent helped invent that investment, said its customers would lose money. Instead of each share being worth a dollar for every dollar invested, it said its customers’ shares were worth only 97 cents. In Wall Street parlance, it “broke the buck,” a rare occurrence

http://finance.yahoo.com/banking-budgeting/article/105792/Money-Market-Funds-Enter-a-World-of-Risk



How bad is it going to get. I can't even look at my 201K plan that is 80% stocks. I also have a little liquid cash in WaMU and in a money market fund at my credit union.

It is scary because I check all my accounts on line and get this sick feeling I will check one day at it will all be shut down with a stroke of a key . . . it must be some subconscious paranoia from psoting on BBF. : )

Edit: Please move to OT . . . thanks

 

[barfo]

It's only money. You'll still have S2.

barfo

 

[BLAZER PROPHET]

Just stay the course and don't panic. I'm an old man now and I've seen a few recessions. This too shall pass.

 

[MikeDC]

Just stay the course and don't panic. I'm an old man now and I've seen a few recessions. This too shall pass.

I'd second this, but with the proviso that people should make sure the course they're on is a sensible one. I'm not cleaning out my brokerage account and tucking money into the floorboards, but although I try not to get into giving financial advice, I feel pretty comfortable telling people (like my neighbor yesterday) that now probably isn't the time to go out and buy up all those cheap financials unless you're treating it as a weekend in Vegas sort of move.

 

[WarriorFan]

Just to clarify for some people reading this. Money market funds are different from money market accounts. Money market accounts are what most people have at their banks and they are safe. Funds are only held with brokerages, not at banks. They can fluctuate but are still very conservative.


I disagree about not buying financials. If you have a buy and hold mindset I think this is a very good time to buy. I wouldn't get individual stocks but financial index funds can't get much lower than they are now and the country can't survive without a financial market so it will definately bounce back, just don't expect it to do it this month.