By muratart @

A word of caution, dear investor, about money market funds: they’re not all created equal. In fact, when it comes to your lazy cash, you want to treat it with kid gloves. There’s a reason it’s on your couch. The world’s a dangerous place.

Yes, you want to get it into the big wide world to do something productive with its life. But you also don’t want it coming home one day saying: “I gambled, and I owe Mr. Big $20k. Can you help?”

Back when the financial crisis unfolded, Lehman Brothers failed, panic set in, and money markets “broke the buck” (trading below a net asset value of $1). But it was the leveraged stuff offering crazy rates that took it on the chin.

A lot has changed since then, but has it? It doesn’t take much to be sold by some broker looking to get your business promising “risk free” rates well above reality. Sure, they might work out in times like these, but what happens when the black swan swoops in for an easy meal?

Your Survival Guy cares about you. Risk is a four-letter word I avoid like the plague.

Action Line: When you’re ready to talk, let me know.

P.S. Safety First: I like the Fidelity Treasury Money Market (FZFXX) as a core money market.

Originally posted on Your Survival Guy