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Old 07-15-2008, 09:29 PM   #61
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There's no money market risk if you're MM is in an annuity. Otherwise there is some risk if the surf is too flat for Nords to be out. One contrarian indicator is if REWahoo tells people all of the reasons they should move to Texas, but only if CFB also professes to like tofu-wrapped bacon within a month of that.

All bets are off if Rich commits to retiring 'this year' instead of 'next year if the economy is good'
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Old 07-15-2008, 09:33 PM   #62
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Obviously, since I'm typing here, one can still view posts of those on their ignore list. However, it does cut down on the chaff while reading.



And surely you know what emeritus means?



Well, feel free to compare away. What's the NPV and IRR of whatever annuity mix you choose with whichever riders you like? How does it compare to whichever other funds you'd like to compare it to? Feel free to start a new thread on the subject, I believe it's been suggested to pursue that a few times. Or, dig up one of the other annuity thread and start the discussion there.

I'm only suggesting that including a fund such as the managed payout funds would be a fair comparison. As opposed, for instance, to hatian penny stocks.

My only contribution is that I know what the inside of an annuity company looks like and I wouldn't trust one with my money over what I reasonably expect my investment horizon to be... and I'd get a better deal on an annuity than just about anyone here. You can discount that as familiarity bias, though.
If you want to talk about annuities go to the annuity thread and leave ERD50 alone please.
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Old 07-15-2008, 09:48 PM   #63
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Old 07-17-2008, 03:33 AM   #64
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Thanks Want2retire

I looked at Vanguards explanation of each MM fund and it looks like both the Federal and Treasury are all AAA rated government so I'm not sure what the real difference is saftey wise ...maybe none?

Jim
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Old 07-17-2008, 08:06 AM   #65
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Thanks Want2retire

I looked at Vanguards explanation of each MM fund and it looks like both the Federal and Treasury are all AAA rated government so I'm not sure what the real difference is saftey wise ...maybe none?

Jim
Jim, it is up to you to assess what you want to invest in. You can find out what each is invested in (not just the ratings) by reading the documents I cited in my post to you earlier in the thread (see below). The Treasury MM fund is invested in treasuries only. The Federal fund is not.

On page 28 of the annual report it lists the Federal MM fund holdings, which at that time apparently included some Freddie Mac and Fannie Mae and such. Those may (or may not) be great holdings, depending on how things unfold. Also, they may have moved away from these holdings since that time so do your due diligence.

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Jim, in evaluating Vanguard MM funds it helps to check out the information on each fund's Vanguard webpage. The page for the Vanguard Federal MM fund is at https://personal.vanguard.com/us/funds/snapshot?FundId=0033&FundIntExt=INT . The page for Vanguard's Treasury MM fund is at https://personal.vanguard.com/us/funds/snapshot?FundId=0050&FundIntExt=INT

Then, click on "holdings" to get an overall idea of what the fund invests in. Click on "Who should invest", too, to find out some more hints about whether that particular MM fund is suited to you. Then, go to "Prospectus and Reports" and browse to find out more specific information.

It's not likely that any Vanguard MM fund would "break the buck" (and thanks, Rogersteciak for the terminology!). But in uncertain economic times such as we have been having, I believe it's something to at least view as a remote possibility.

By the way, according to their February 29, 2008 semi-annual report, it appears that the percentages of VMMXX holdings in Freddie Mac and Fannie Mae decreased quite a bit since 2007. So, VMMXX fund management is probably way ahead of us on thinking about such things.
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Old 07-18-2008, 05:43 AM   #66
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Thanks want2retire

I understand it better now.

One of the big questions I have now is if a MM fund ever did "break the buck"?

Jim
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Old 07-18-2008, 08:14 AM   #67
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Thanks want2retire

I understand it better now.

One of the big questions I have now is if a MM fund ever did "break the buck"?

Jim
Nope, never has happened. Housing has never gone down in value across the whole country before, either, to the best of my knowledge.

In other words - - what has happened in the past is not 100% reliable as a predictor of the future. I am not staying up nights worrying, since I believe the probability of breaking the buck is low, but the possibility does exist. If everything always stayed the same, we'd all be millionaires by now.
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Old 07-18-2008, 08:29 AM   #68
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I understand it better now.

One of the big questions I have now is if a MM fund ever did "break the buck"?
To my knowledge some funds have seen their NAV drop below a dollar but the fund added enough of its own capital to restore the $1 share price.

In other words, MMFs have broken the buck, but shareholders typically haven't lost anything because of it. There's no guarantee funds will continue to do this, but they all know that losing money in an MMF would be the kiss of death for that fund, so if they can afford to do so, most likely I think they would continue to support the $1 share price. Again, no guarantees.
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