Today’s WSJ notes that Fidelity, Vanguard, and T. Rowe Price Group have signed up for the Treasury Dept’s guaranty fund for money market funds that were held prior to September 19th. Now all the major mutual fund families with large money market funds appear to be participating in the fund (Charles Schwab is also on the list). Investors wondering about their accounts should check their fund’s web site; participating funds seem to be announcing their participation fairly prominently. You may also want to confirm that the specific fund that you own is covered; for example, Schwab’s U.S. Dollar Liquid Assets …Read More
For the last couple of years, Fidelity Investments has surveyed parents of children under the age of 18 about their plans for future college expenses. The most recent survey of about 3,000 parents, reported in this news release from Fidelity, looks at anticipated college costs and family resources available to pay for college. This year’s survey found that 62 percent are counting on student loans to help cover the cost of their children’s college education.
Fidelity found that one-third of parents have either had to reduce or eliminate the amounts that they had been saving regularly for future college expenses, …Read More
Dimensional Financial Advisors is a passive-investment-oriented investment firm closely associated with Eugene Fama, 2003 Economics Nobel Laureate and father of the efficient market hypothesis. Today they sent me a link to a very nice presentation by their vice president, Weston Wellington. The presentation, “Is It Different This Time?” runs about 18 minutes long and puts the present stock market gyrations into a historical perspective by reviewing some of the “bear markets” of the last 50 years. It’s not overly jargon-filled and should be pretty accessible. The present market downturn reflects concerns about the non-availability of credit, the extent and …Read More
Having discussed why having an emergency fund is a good idea and how big an emergency fund needs to be, I’d now like to talk about investments suitable for an emergency fund.
Generally speaking, some part of your emergency fund needs to be in a liquid, readily accessible investment whose value does not fluctuate much. An emergency fund invested entirely in your employer’s stock would therefore be a really, really poor choice. Typically, emergency funds are invested in savings accounts, CDs, money market accounts (taxable or tax-free), or Treasury bills/notes/bonds. Where bank deposits are used, they should be FDIC-insured. …Read More
Congress voted down the Troubled Assets Relief Program (“TARP”) legislation, much to the chagrin of the financial markets. At the moment, the markets continue to be in distress, despite a “dead cat bounce” in stocks today. What should you be doing in terms of your household finances?
If you’ve already established a diversified investment portfolio that fits your goals, your situation, and your tolerance for risk, sit tight. This is not the time for making big moves into or out of your investments. The stock market is likely to swing wildly for a while until there is confidence that the …Read More