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Hi Hugo,
Thanks for your reply, however I think we may be
talking about two different things. For example, money that I send to my broker
is insured, between SIPC and London insurers, for up to $25M including $1M in
cash (I only wish I needed that much 8 - )
This does not insure my actual investments - i.e.,
if my stock goes down, my losses are not insured. Rather, I believe
it covers me in the event that something goes wrong at Ameritrade, i.e.,
bankruptcy, embezzlement, etc. But now Ameritrade tells me that once my cash
gets swept into the money market funds run by Reserved Funds, their insurance no
longer covers me. And, Reserved Funds tells me that they have no insurance
of this type at all, and that I don't need any. Well, I am certainly no
financial wizard, but if you read enough financial news, you get the
impression that there is always some type of fraud or mismanagement going
on somewhere - it just seems like a matter of when and where the next
scandel will break. This seems to be equally true of the
exchange-traded companies whose stock I can buy, as well as the big
brokerage houses who manage funds and investors accounts. It is the lack of this
type of insurance that bothers me. Or, it could be that I am overly
concerned about nothing, or that I am just not sophisticated enough to
understand everything - what do you think?
Steve
----- Original Message -----
Sent: Monday, May 23, 2005 3:34 PM
Subject: RE : [amibroker] OT: Question
for Fund Gurus
Hi,
Yes,
your money is safe. If you find out what the money market fund is composed
with, you will see mostly short term us government notes and bonds or any AAA
ranked short term bonds. That’s why it is called a money market fund. If you
think United
States
is about to go bankrupt, then you should reconsider money market fund
;-)
Regards,
Hugo
-----Message
d'origine-----
De :
amibroker@xxxxxxxxxxxxxxx [mailto:amibroker@xxxxxxxxxxxxxxx] De la part de Steve Dugas
Envoyé : 23 mai 2005
13:43
À : Amibroker
Yahoo Group
Objet :
[amibroker] OT: Question for Fund Gurus
I have 2 accounts with my broker,
a regular individual account and a recently opened IRA account. The
broker set up the IRA so that any cash in the account is
automatically swept into a money market fund managed by Reserved Funds. The
money market pays about double the interest of my regular account,
so I was thinking about setting up my regular account this way also.
Before doing so, I asked my broker whether the cash in the money market funds
were covered by their insurance, and was told no, that it was being managed
by Reserved Funds, and I should call them to see what insurance they
have. I did, and they said they have *no* insurance at all, but that none is
necessary because, under the federal regulations which govern funds, and
which they must follow, my money would still be safe even if Reserved
Funds went under. My questions are:
1. In the unlikely event of fraud
or mismanagement on the part of Reserved Funds, could I lose the money in
these funds?
2. Which should I do -
cancel the "money market fund" option on my IRA, or set up my
other account to use this option? It is more important to me to know
my money is safe than to collect an extra 1% or 2% in interest, so I am
leaning towards cancelling this option on the IRA, unless some knowledgable
people can confirm that this money is totally safe even without
insurance.
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