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Strategies & Market Trends : Classic TA Workplace
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To: marc chatman who wrote (5568)7/20/2002 11:51:39 AM
From: marc chatman   of 209892
 
OT -- Question about handling cash assets

This is an issue I have been contemplating for some time -- where to safely put cash assets.

One of my WS friends and I have been debating for about a year whether it is possible for money market funds to "break the buck." He contends it's not possible; I say it is. For sake of this discussion, let's say it is.

Apart perhaps from gold, it seems to me the best place to have money (for a US resident) is in cash or equivalent assets backed by the Federal Govt. No great stroke of genius there.

The most obvious choice is T bills. I've never bought T bills directly. For those who have, do you do it through your bank or broker, or do you do it directly? How do you decide which maturities and issues to buy? Is a 100% treasury fund offered by a Fidelity or a JPM as safe as holding the instruments directly, or would the fund carry Fidelity or JPM risk?

The alternative would seem to be bank deposits insured by FDIC. But the insurance is limited to $100k per bank.

For those who have or plan to go into safety mode, I'd be interested to know what your plans are. I have many friends who have bought triple tax free muni's thinking that those are safe enough (with the added benefit that they have recently offered yields close to the taxable equivalents). Do any of you think the muni's are a good bet?

TIA

MAC
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