European institutions are so stricken that currently investors are actually paying a more financially secure Germany to take their money. These financial storms in Europe and the US are creating waves that could smash against Canadian shores at any moment, so now might be a good time for an investor to examine their exposure to Money Market Funds.
A startling line from a Fed Official in the artice below: “The delay (in being able to withdraw your money) would ensure that redeeming investors remain partially invested in the fund long enough to share in any imminent portfolio losses or costs arising from their redemptions,”
Huh, an investor has to pay for losses arising from withdrawing their money????
…more HERE
Take my wife, please.
So what do I do? Leave my money in there or pull it out .
Oh yeah what is a money market?
Is that for ex like trading currencies and stuff like that?
If so I ain’t worried cause I specifically stay away from them , as well I invest heavily in Canadian commodities and Canadian buisnesses .
Completely out of the market for over a year now. I just closed my investment account this spring.
“Portfolio losses or costs arising from redemption” — which couldn’t possibly arise from governments over spending and over printing the currency, goodness no, no never! Sheesh!
DrD:
What it means is that the fed doesn’t want to be left holding the bag.
But, by harming liquidity – slowing or delaying trading – the govts will only spook the markets even more and really create conditions for a panic market.
It really is surprising that an offical at this high a level would be so naive about the consequences…
I’ve been out of the markets for nearly 2 years. European markets are already heavily spooked as it is, which is why investors are going to germany and saying: “take my money, please!”
That’s smart announce something like this and them wonder why there is a run on money market funds. D’OH
SDH >
I also closed everything out last Nov/11. Am now just trading a few throwaway stocks on a daily/ weekly/ monthly bases.
You need to understand that not just the markets are corrupt, but the very currency as well. The Canucks may be somewhat safe with THEIR dollar, but the US dollar may rapidly turn to toilet paper in the upcoming collapse. Do also note that any assets you have stored in safe deposit boxes may be unaccessible as well. And understand that there is evidence that “gold certificates” for bullion supposedly held for investors may have been duplicated, meaning that the actual gold available is far less than their clients believe. Of course, if you are one of the Right People, you will be promptly made whole. But for Mere Citizens…
Ann Barnhardt has some fairly good summaries on her site.
A money market fund is like a savings account with your money pooled with others, like a mutual fund. They are paying very low interest right now.
As silly as it might sound, the US Dollar is one of the safest places to put your money for time being. A global economic slow down will cause commodity prices to fall, and causing the Canadian dollar to soften against the USD. Global turmoil will cause a flight to the USD which will rise against other currencies. Oil is higher right now mostly on noise out of Iran.
I just closed down my ING tax free savings account and moved the money to a canadian bank. I don’t trust any European banks right now. I also consolidated several RRSP mutual funds into a self directed plan. Preferred shares and reits can make me 4 to 5 percent, with minimum risk. which is 4 to 5 percent more than the professional money managers have been making me.
Anecdotally, I had a couple of GICs (invested with a Schedule I bank) come due this past week or two. I went to my branch and sought to move my money, and got in return that:
1. One of the GICs had been reinvested without my consent for a one-year term (this was reasonably promptly undone, but it required a manager to authorize it; as it happened, it took another seven days to have it moved where I wanted it to go).
and
2. The other of the GICs had to be “traded” to find its market value three days after its expiry date. As it happened, there was a small devaluation from what I had been, I thought, guaranteed.
I was wondering if the bank was having cash flow problems — and now this post!
@minuteman: “I just closed down my ING tax free savings account and moved the money to a canadian bank. I don’t trust any European banks right now.”
To the best of my knowledge, ING Canada is a separate entity, and deposits are insured under Canadian law. That being said, I’m holding off putting more money in their GICs, and have been spreading new savings around multiple banks.
I’m missing out on a percent or two of interest, but having high liquidity and diversified risk for next year or so is paramount.
Slightly off topic but a word to the wise. If you are an executor of an estate and the deceased had a TFSA with an on-line bank, beware. It is time consuming and frustrating to get the money. I’ve been slogging it out since late March and have not got anything yet but delaying tactics and more forms to fill out and refilling previous forms.