Bring Sanity to Bloggers on Money Fund Issues

I’d like to call on anyone who is able and familiar with issue surrounding money funds to check some blogs and try and bring sanity to some of these doomsayers. The Wall Street Journal’s MarketBeat Blog Discusses “When $1 Is Not Worth $1″, by David Gaffen (http://blogs.wsj.com/marketbeat/2007/11/15/when-1-is-not-worth-1/#comment-13890). While this isn’t the “world-is-ending” tone of most, the follow up posts are leaning that way. Please help join me in telling the world that money fund investors will be okay, that losses in SIVs will be minimal and manageable, and that investors are fine sticking with funds!

Thanks!
PeteC

Criteria for Choosing Money Funds

Since I’ve been getting the question a lot recently, I thought I’d put down some thoughts on what I suggest investors look for when choosing money funds. I’m always wary of yield, so I recommend ignoring the No. 1 performer and going with a “B” student. Common wisdom also suggest picking a recent top fund, but I’d advise looking at longer-term rankings and performance.

Bigger is better. Not only do you get deep pockets, but expenses usually are lower in larger funds. Perhaps more importantly for small investors, conveniences and service is likely to be higher at a larger firm. So go large with the fund and the provider.

Don’t bother with treasury or government funds. You don’t need the safety, and you lose the yield and liquidity. Look for a conservative investors base….

I’d be happy to discuss and would love to hear your thoughts!