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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: BSGrinder who wrote (53410)	3/25/1999 12:40:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Kit, It isn't necessarily the likelihood of rate rises that bothers me as the loss you take if they do happen. If you own for five years and reinvest that 7 1/2% dividend every year, you are not going to get hurt. But for one or two years, the stocks can fall further than the dividend can protect you. I am not as worried about money funds that invest in all P1 paper. P2 bothers me. So, check your fund's prospectus and see what they buy. I was around in the mid 1970s when companies had trouble rolling their short term paper. And they were not garbage cos. They had names like Disney and American Express. But if you stick with the creme de la creme on corporate credits, a money fund should do o.k. Seriously, if a significant number of the P1 credits go belly up, we have a lot more problems than any of us losing our money fund holdings. Any decent money manager should see a crunch like that in the development stage and load up on T-Bills. Too bad we don't have that many decent money managers. <g>