Money Markets Questions
Is anyone aware of any money market MFs that are currently paying more than .01%? Are you telling your clients to hold their cash with you at essentially no interest or are you suggesting they go to the bank (screw you Ron 14) with their cash in the short term?
I hear ARS’s are pretty hot.
I’m following the directions of my Lord Abbett wholesaler and putting all of my cash into LDLAX.
Actually I would like to know the answer to this also. Id rather have the funds under my umbrella than as a branch asset. I have had to hear about ING savings for 2 years and now people are pissed about how far it has come down (idiots actually thought it would be at 4% forever). They are now putting it in .5% savings vs 1-1.5% at ING just because they feel the bank is "safer."Is anyone aware of any money market MFs that are currently paying more than .01%? Are you telling your clients to hold their cash with you at essentially no interest or are you suggesting they go to the bank (screw you Ron 14) with their cash in the short term?
C’mon, I can’t be the only struggling with this. I’m bleeding cash/cds right now.
Just push some cash equivilent proprietary security on them.
You’re bleeding cash/CDs as in their leaving your office?
I was halfway joking about the LDLAX, but it might be a viable alternative for you. The C share yields just north of 4%. Hold it for a year and you're golden. It's a short duration fund so a swing in interest rates won't kill it. Only downside is the 1% CDSC if they need the money in the next 12 months. If they're concerned about it, leave some money in their MMKT earning the 1 bps. If they don't want to do that I've had some clients move their money to local banks. Some have rates in the 1% range. I don't like it, but I'm not getting rich, and neither a they, from my client's emergency funds either. National average on MMKTs the last I heard was 2 bps. Small, local banks that need the cash flow are going to be their best bet.There are some great ideas out there, but I can’t present them without full disclosure and without including a prospectus. heheheheh
Anyone have a recommendations for a no load short duration fund? Just for my personal investments. I have cash sitting that I want to get to work for about a month, until my current puts expire worthless.
I know you can't - yet people still do.You should know better than anyone that we can’t give you investment advice on this forum.
I go through a discount broker, so maybe I can see if I can get it for “free.”
Any chance its daily accrual?
Is it safe to invest on money market? I want to earn more and sometimes I’m thinking of investing in one. Maybe I need to get your opinion guys before I go ahead with it.
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For those of you with clients over 591/2 who were smart enough to put a token amount into a fixed annuity in the past with non-rolling surrender charges, this is not a problem.
Unfortunately, I was not smart enough to do this.[quote=anonymous]For those of you with clients over 591/2 who were smart enough to put a token amount into a fixed annuity in the past with non-rolling surrender charges, this is not a problem.
Unfortunately, I was not smart enough to do this. [/quote]This is an oft overlooked strategy. We're talking to all our 50-something clients and prospects that have $20k+ in CD money they won't be needing anytime soon to get one of these started and get clock ticking on the surrender charges. The product we like has an 8yr surrender so the sooner people get these going the better!
The 3% minimum most of these carry is looking pretty darn good right now.
It’s a great idea and I wish that I had done this earlier in my career. I now have virtually every client age 50 and older put at least a token amount into a fixed annuity. As to the 3% minimum, wow!
If that is a product that is 3% in most states, I'd greatly appreciate hearing the company either here or via PM. Thanks![quote=iceco1d]
It's not a "no load" fund, but I'd look at the Goldman Short Duration Tax-Free Fund. Licensed people at my firm (FAs, or support staff) can buy A-shares @ NAV.
[/quote] Good choice Ice. We use several of the GS Short Ds.Our job is to help clients properly deploy their money over time through a variety of markets.
In this low-interest market, we should explain to clients that money without risk will not earn any yield.
Now is a golden moment to invest in quality dividend-paying equities, and keep some cash on the side for liquidity needs. Why would anyone want to lock in today’s yields for ANY length of time in CDs or bonds or bond funds is beyond me. I’d rather earn NOTHING in a money market fund, and at least have a CHANCE to make some type return over the next year or two than lock the money in a 1% CD or T-note or bond fund. Liquidity is an under-appreciated feature of investments that is only truly appreciated when there isn’t any.
Buy blue-chip, Dow Jones, large cap equities. Buy utilities, buy pipeline MLPs.
If clients don’t see it that way, you need new clients.
I agree with you, but what is wrong with a short duration bond fund ?
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Prod.
Institution
Rate
CM
APY
Min Deposit
Advertiser comments
< = value=11629_18 name=>
3 yr CD
Goldwater Bank
Scottsdale, AZ
Posted: 12/11/09
2.99
S
2.99
$50,000
< = value=14205_18 name=>
3yr CD
Discover Bank
New Castle, DE
Posted: 12/11/09
<?: prefix = v ns = "urn:schemas-microsoft-com:vml" />
2.57
D
2.60
$2,500
Rates that consistently beat the competition. Open a CD today!
Those are for 3 yrs. Most that are 1 year are 1.5% and less.
Just got this tip from a vet this week:
Assuming you're selling a taxable bond:Suppose your client has $20,000 in their money market earning 0.003%. That's $60/year. (Similar case can be made with 0.006% 6-month CD's.) Next, show them what their $20,000 would yield in a 7% corporate bond. That's $1,400/year.
Then, do the math right in front of them. $1,400 - $120 = $1,280. They're losing $1,280 per year by refusing to move from their money market into bonds. Leaving $1,280 on the table. Ask them what they'd buy right now if you handed them $1,280 cash. Twelve $100 bills. He said right then is when the light bulbs start going off in their heads. Silly clients.
BSV. Wrap it and give philosophical advice.
[quote=Wet_Blanket]Anyone have a recommendations for a no load short duration fund? Just for my personal investments. I have cash sitting that I want to get to work for about a month, until my current puts expire worthless.[/quote]
Um, can’t you buy your favorite short duration load fund at NAV?
Ok one year. And I am just saying this is what clients find on their own at BankRate.
< = value=14664_15 name=><?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
1 yr CD
Ally Bank
Midvale, UT
Posted: 12/11/09
<?: prefix = v ns = "urn:schemas-microsoft-com:vml" />
1.83
D
1.85
$0
Always competitive rates. No monthly fees. Member FDIC.
Any one that wants a CD deserves a CD.Clients who want CD deserve CD’s, no doubt. Clients who want CD’s are also so afraid of everything that buying a CD at an online bank freaks them out.
[quote=gethardgetraw]Just got this tip from a vet this week:
Assuming you're selling a taxable bond:Suppose your client has $20,000 in their money market earning 0.003%. That's $60/year. (Similar case can be made with 0.006% 6-month CD's.) Next, show them what their $20,000 would yield in a 7% corporate bond. That's $1,400/year.
Then, do the math right in front of them. $1,400 - $120 = $1,280. They're losing $1,280 per year by refusing to move from their money market into bonds. Leaving $1,280 on the table. Ask them what they'd buy right now if you handed them $1,280 cash. Twelve $100 bills. He said right then is when the light bulbs start going off in their heads. Silly clients.[/quote] Then run a duration equation in front of them. 30 year maturity = 25 year duration, 2 percent interest rate increase = 50% decline in market value, clients love that for their safe CD money! Just giving you a hard time, we are all dealing with this, I have tried the short term bond funds but let them know about possible principle fluctuation, I like to mix in TIPS as well.
It's complicated. I work for a RIA, but have my FINRA licenses with a firm that distributes the mutual fund we are the IA for. I don't have my personal account with them and I expect a head ache for any load waivers. I just have a TOS account that seems to handle everything to my liking. But thanks for your concern.[quote=Wet_Blanket]Anyone have a recommendations for a no load short duration fund? Just for my personal investments. I have cash sitting that I want to get to work for about a month, until my current puts expire worthless.[/quote]
Um, can’t you buy your favorite short duration load fund at NAV?
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