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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (37094)7/27/2005 11:16:08 AM
From: ild  Read Replies (1) of 110194
 
Schaeffer's Media Outtakes: The Allure of Cold-Hard Cash
Bernie Schaeffer
7/27/2005 9:49 AM ET

"With the Fed likely to raise rates two or three more times this year, 'you're looking at the average money fund ending the year with a yield of about 3.5%,' says Peter Crane, managing editor at iMoneyNet.com, which tracks money-fund yields. 'From where rates were, that's huge ... 'When interest rates rise, bond funds tend to get hurt,' Mr. Crane says.'I think some investors will see that decline, see a 3% yield on the money fund and think, "This is a good idea again."'"
----(Wall Street Journal - 7/26/05)

Schaeffer's addendum: The S&P 500 dividend yield is 1.7 percent, so if the above piece is correct, the yield on money funds will be double that of the stock market by year-end. Is anyone concerned about assets being drawn out of the stock market and into money funds? I think such a concern is quite legitimate.

Bernie Schaeffer

schaeffersresearch.com
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