You know the stabbing feeling in your heart when you check the performance of your investment portfolios these days? Well, The New York Times is taking the knife and twisting it, care of this revelation:
Money market funds have been among the few places that investors could put their cash and sleep peacefully.
At the moment, that is not necessarily true.
On Tuesday, the Reserve Primary Fund, a giant money market fund whose parent helped invent that investment, said its customers would lose money. Instead of each share being worth a dollar for every dollar invested, it said its customers' shares were worth only 97 cents. In Wall Street parlance, it "broke the buck," a rare occurrence.
With the economy in the toilet (see graphic representation above), what should you do with your earnings? MyMoneyBlog.com has a few options:
Consider sticking with an FDIC-insured bank account.
Invest in a Treasury money market fund.
Invest in big fund companies with lots of assets.
Read the explanations. And if you are considering dumping your stock entirely, consider these two questions:
Question #1: Why do you really want to sell? Can you predict future movements of the stock market? I can't. If you could, then you should have known these collapses were coming, shorted these stocks, and made a fortune. If you bet big enough, you'd be retired right now.
Question #2: When do you need the money? If it's still over 25 years from now, then what's the worry? ... Time horizon is important; Stocks are called long-term investments for a reason.
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