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Are you overallocated in cash?
Wednesday, August 01, 2007
This came in the mail yesterday. While Fidelity is a fine company with whom I have very few complaints, it was not clear until yesterday that they were keeping an eye on my money market balance and thought me a bit too risk averse.
Who knows where that 21 percent figure comes from and you have to just love the "sidelines" analogy - the money market account is a perpetual "benchwarmer" apparently. Well, here's another football analogy, "Coach, I don't want to go in - they're gettin' creamed out there right now!"
Maybe instead of "gearing up for a large purchase" I'm "sitting tight to avoid a large crash".
It could just be me, but somehow, this has the feel of last fall's National Association of Realtors ad campaign urging homeowners and potential homeowners, "Now is a great time to buy or sell a home!"
11 comments:
Now is a great time to generate brokers fees.
Who knows, it could be legit. Most people don't use a brokerage firm as a bank so maybe they wanted to remind you that you could be making more by being in the market. For the record, I have my money at E-Trade because they pay over 5% to sit on the sidelines :)
Yeah, it's such a darn shame we're ONLY making a guaranteed return in our money markets....
Gee, you think Fidelity, where we have our holding too, would have some understand of the value of diversity and of cash holding during volatile periods.
At least I hope so.
It would be better if they said, get your money out of our money market and put it in one of our FDIC insured bank CDs. Maybe the money market has investments in mortgage backed securities and this is a heads up.
NZ
Got the same letter from them.
Thanks, but no thanks, Fidelity.
I'm earning a guaranteed 5.8% in my Fidelity money market fund right now. Good enough for now.
:Chuckle:
Only 21% cash Tim? I'm at 50%. And not including treasury bonds in that....
No, it says "more than 21%".
I have 2 stupid questions:
1)How much of your "money market" account's balance is invested in real estate?
2)How much of your "money market" account's balance is invested in corporate debt?
HINT#1: You might want to check the facts before answering either question.
HINT#2: Check Mish's blog: S&P now rates a majority of corporate debt "speculative".
Thanks for your attention.
Regards,
-Bob
Do you have a link handy?
Found it again. Near the end of:
http://globaleconomicanalysis.blogspot.com/2007/08/totally-discredited-s.html
Thanks
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