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Your 'Safe' Money-Market Fund May Be At Risk

TedTed
in Fund Discussions
FYI: (Follow-Up Article)
401(k) investors need to rethink money-market mutual funds
The Securities and Exchange Commission earlier this summer released new money-market mutual regulations that those saving for retirement might want to review, especially if they are among the millions who have invested on average anywhere from 2% to 6% of their 401(k) in such funds
Regards,
Ted
http://www.marketwatch.com/story/your-safe-money-market-fund-may-be-at-risk-2014-09-02/print

Comments

  • VintageFreakVintageFreak
    Stop investing in MM funds altogether? What nonsense? Someone in retirement does not want all his money in stocks/bonds. If he is raising his "cash" stake does not mean he is "invested" in MM funds. It is because one does not want to risk all capital "invested" in Stocks/bonds.

    Second, all 401Ks do NOT offer Stable Value funds anymore. How can participants "look for stable value funds?".

    Finally, incompetent regulators before coming up with such a rule need to also make 401k plan participants offer a CASH option. In IRAs at brokerages one has that option. In 401ks that does not have an option. If Stable Value fund is not available in 401k and MM funds are risky because they NAV can now float how is a retiree to safeguard wealth accumulated over the years?
  • Old_Skeet
    edited September 2014
    Hi VF,

    My take ...

    MM funds were a way for investment firms to keep money in house once an investor sold out of one, or more, of the firm's investment products (funds). By doing a nav transfer form say a stock fund to the firms's mm fund then the investor had the option to buy back into the same, or another investment product (another fund) at nav and avoid paying the sales commission for the second time. Naturally, there are certain conditions that may apply to this and the conditions may vary from firm to firm.
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