Re: [MLUG - DISCUSSION] Money Markets?

[Stephen Montgomery-Smith <EMAIL:PROTECTED>]

Jennifer Dozar wrote:
> I was wondering about money market savings accounts... I got a refund
> check from school and thought about putting a good portion of it into
> something that could turn some money back onto it.  or something along
> that line.  And the other part, pay off a few past accounts and maybe
> help with the car thing. (should still be getting like 3k from insurance
> for the car) I am not well versed in the financial industry. just
> wondered if some of you guys knew about this kind of stuff.

I used to study this kind of thing.  The conclusion I came to 10 years 
ago was to put money into volatile mutual funds, and don't look at it 
again for several decades.  I don't think this strategy has worked 
particularly well in the last five years, but my sense is that in the 
very long term this is rather a good strategy.  (Volatile means that the 
funds tend to go up or down more rapidly than usual.)

If you want to do money markets, which make less money but which are 
much safer, my memory was that even there, no load mutual fund money 
markets were superior - they had slightly higher returns, and there was 
no minimum investment period.  The only downside is that the principal 
wasn't guaranteed - however if the economy were to turn so bad that 
money market mutual funds would decrease, then probably all those 
federal guarantee agencies would go bust as well.

But as I say, these conclusions are 10 to 15 years out of date.

--

Stephen Montgomery-Smith
EMAIL:PROTECTED
http://www.math.missouri.edu/~stephen

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