Investment advice

[lawman]

I need to move some money from my mm fund into something else..It's paying about 4.6%..I've looked at corporate bonds, c.d.'s, treasuries and retail notes and government agencies ...All are paying less.. In this case what is a good alternative to mm funds?

 

[TheWizard]

Stock index funds...

 

[Sunset]

What are you wanting ?

A MM is good for higher interest for a short time and lower interest if rates fall.
Locking in your money (treasury, CD, etc) gives you set interest for the period you chose regardless of what interest rates do.

I just bought some 5 and 7 yr treasuries around 4.2% , yes they are lower than today's MM, but I believe they will pay more within a year, and more than inflation (which they already do).

 

[erkevin]

The million dollar question! There have been several on-going threads regarding this. One on MYGAs, one on CD and MMs, and one on Bonds. I am in the same position as you and have not arrived at a conclusion. My money remains in a mm fund at Schwab until a clear winner emerges (if ever).

 

[RetiredHappy]

MYGAs pay more than CDs and MMs. If you do not want to invest in equities, MYGAs is the way the go.

 

[Kings over Queens]

I need to move some money from my mm fund into something else..It's paying about 4.6%..

when you say "need," I have to counter with "why" because the why tells us what might be better to solve your need. right?

what are you trying to accomplish?

 

[lawman]

I will likely just sit tight..The only reason I say I need to move some out is because I am overweighted now..I'm not sure rates will be any lower a year from now and I don't want to add to my equities.... Just wondered what others are doing..

 

[RetiredHappy]

I will likely just sit tight..The only reason I say I need to move some out is because I am overweighted now..I'm not sure rates will be any lower a year from now and I don't want to add to my equities.... Just wondered what others are doing..

Buy MYGAs.

 

[Tetto]

I would do the same; sit tight. I have a nice chunk sitting in Marcus right now, but still deliberating what to do.

 

[lawman]

Buy MYGAs.

I know nothing about them

 

[OldShooter]

I will likely just sit tight..The only reason I say I need to move some out is because I am overweighted now.. ...

So you are changing your asset allocation strategy to match your current holdings? Seems kind of backwards. I think most of us change our holdings to match our chosen AAs.

 

[Pointby2]

I'm looking my MM funds too. I put some into JAAA, but not a lot.

I don't think we'll be able to spend the money we have, so making a few more points on it doesn't seem like its' worth the risk. Something I read here about already winning the game.

 

[Lorenzo]

As I understand the utility of a MM fund, it's best for money you might need in the short term--just slightly lower than a high-yield savings account in terms of immediate accessibility. I have some in SWVXX. If you don't believe you will need the money any time soon, then it could instead be in bonds, Treasuries, CDs, MYGAs, etc. But I'm still learning.

 

[Dalton]

That's the usual way people look at it. The MM's are still "high", though, and higher than CDs and treasury bonds. CD's and treasury bonds have the future "expected" rates (and their risk aversion) factored in. So, you lock into lower rates for longer terms, and hope the MM rate doesn't rise a bunch and you miss out on better gains, or if MM rates drop you feel good about your decision to switch to CDs or treasury bonds.

But, the 1 year CD and treasury rates aren't too much lower (this is subjective, of course) than the MMs, and the fed isn't talking drastic rate drops, so I don't have a whole lot of reason to feel I need to move out of VMFXX this year.

 

[jazz4cash]

I know nothing about them

They are pretty easy to understand. Many call them the insurance industry version of a CD but early withdrawal penalties are severe. No FDIC. I just posted that some A rated issuers are raising rates a bit. 5.5ish for 5 yrs. Popular brokers are Blueprint Income or Stan Annuity Man. Lots of info there. OTOH a brokered CD or Treasury ladder will protect you from falling rates with better liquidity.

 

[Koolau]

They are pretty easy to understand. Many call them the insurance industry version of a CD but early withdrawal penalties are severe. No FDIC. I just posted that some A rated issuers are raising rates a bit. 5.5ish for 5 yrs. Popular brokers are Blueprint Income or Stan Annuity Man. Lots of info there. OTOH a brokered CD or Treasury ladder will protect you from falling rates with better liquidity.

Most MYGAs are structured in terms of how much you can take out in each subsequent year of ownership without the penalty. These should NOT be considered to be "short-term" like a MM or savings account or even a CD where you might lose 90 days worth of interest for early withdrawal.

Check this out:

What Is a Multi-Year Guaranteed Annuity (MYGA)?

A MYGA is a type of fixed annuity that offers a guaranteed interest rate for a specified number of years.

www.annuity.org

 

[wolf]

OP
If you are willing to "play" the Agency game. You can get above 5%, on "Callables". Takes a bit of work
but can be rewarding.