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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (31971)	5/6/2005 5:52:54 PM
From: Colin H	Read Replies (1) \| Respond to of 110194

A friend of mine sent out this email yesterday: [I’m sending this message off for people who may have put money in the Ford Money Market Checking Account based on my recommendation. If you don’t actually have money in that account, you can ignore this.] In the past I've recommended the Ford Money Market Checking Account to a few people for a convenient higher-yield checking/savings alternative, based on my positive experiences with this account. Since I may be responsible for some people actually investing in the account, at this time I would like to update my recommendations, based on very recent news and events pertaining to Ford Motor Credit. As those of you who have opened an account know, this account is not FDIC insured, and is not diversified, but rather a direct debt of Ford’s financing arm. In the past I have considered that money in this account is still very safe, due to the large capital reserves of Ford Motor Credit and its parent company, as well as the relative stability of the parent company and the industry sector as a whole. However, today the credit rating for certain types of credit from Ford, Ford Motor Credit, as well as for GM and its equivalent financing arm, has been down-graded by the S&P credit-rating agency. While I do not feel that this move is an indicator that anything bad is going to happen, I do think that it prompts a more reserved recommendation of the Ford account, and a move to a more cautious and balanced investment strategy, which I will outline below. I still have a lot of faith in the Ford account, but I don’t want my recommendations to result in anyone having all their eggs in that one basket. [As a side note, I feel that if anything catastrophic were to happen to threaten the Ford assets, there would be plenty of warning; specifically I feel that the fate of GM will provide a great indicator for the future of the sector, and if trouble were ahead, a failure of GM would come much earlier than any real threat to Ford and its assets (I’ve intentionally stayed away from the GM equivalent of the Ford Money Market Account).] The strategy that I am now suggesting for higher-yield investing, with the high liquidity and convenience of a checking account, is to combine the Ford account with an additional FDIC insured account. Specifically, I’ve been very happy with ING Direct’s Orange Savings Account. It is providing good rates (3.00% vs. 3.18% in the low tier at Ford), and is just as easy to use over the web. Although you cannot write checks, you can rapidly transfer money to and from the Ford Checking Account, or other brick-and-mortar checking accounts. By keeping a comfortable amount in the Ford account, and keeping the rest in the Orange Savings account, you can achieve added protection for your assets, while still maintaining the liquidity and convenience that you’ve been enjoying from the Ford account. I’ve been using this combination for a while, and am very happy with its ease and utility, and I’d like to see that anyone who currently only has the Ford account would move some money out in order to create a more balanced investment. Anyway, that’s my take on things. If anyone is interested in opening up an Orange Saving Account, please let me know before you do. ING is coincidentally offering a referral bonus of $25 to you and $10 to me if I refer you. [No, this is not why I’m recommending this account today! But it’s a nice bonus for safer investing.]