I thought my mutual fund company did something quite odd the other day

[Phoebe Loosinhouse]

I moved out of what I considered to be some volatile funds quite a while ago and parked my money in US Treasury Money Markets. I know that it isn't making anything, but at the same time it isn't losing anything either, like the majority of funds out there. Plus, I am just looking at it as a parking space until I decide what I want to do.

Anyway, my fund company called up and asked if I knew that that fund was now making zero percent and did I want to listen to their recommendations? I said no thanks. (and actually, I will remove the funds and put them in a good old plain vanilla CD).

But here's my point - they NEVER called me up when my OTHER funds were LOOSING money hand over fist, spiraling downward at unparalleled speeds - So, why are they so solicitous now?

[grannie4peace]

1. trying to scrounge up business.

[CoffeeCat]

2. We did the same thing...

We moved it all out of the stock market and into a MM fund. Like you, we aren't pleased that we aren't making
anything, but it's better than being a financial sitting duck.

No way in hell was I going to ride out 2009, with money sitting in the stock market.

They called you, because they're desperate. They don't make money off of you, if your funds are parked in a MM fund.

They make money off of you if you invest in the stock market.

I imagine that there's a lot of fear out there, and part of their sales tactics is to go after people who got out
of the market--and might be persuadable to return.

[DeepBlueC]

3. wouldn't you at least earn interest in a CD

or even a savings account?

[CoffeeCat]

5. These are our 401k funds...

We are limited in how we can invest the money.

We have choices that are within the plan---which is run by my husband's company. I think we're lucky
that we had the option of taking it out of the stock market and putting it in a MM. I'm relieved that
this was, at least, an option.

There were no CD or savings account options within the 401k.

And pulling it out entirely to do that--would mean a 30 percent penalty.

[Auggie]

7. I'm in the same boat

I put about 1/5th of my IRAs into Treasuries last August -- regret not putting it all in.

I've been looking into Green mutual funds. Might be the time while their price is low.

[DeepBlueC]

9. oh god...I see

I am a bit distanced from this sort of thing living in Canada...my pension with the University accrues without my having to share in the University's investment losses (so far). We also have individual tax-free (or tax-deferred)retirement savings programs you can contribute to up to a a limit but right now my own pension plan contributes all that I am entitled to put away without taxes toward retirement. So my savings have been in CDs or, lately, Investment Savings Accounts which have better interest than regular bank products (meaning that they are like the savings account I had all through my minority)but full liquidity. And as of this year we also have special tax-free investment savings accounts to which you can contribute $5000 a year without paying any taxes on the interest that compounds over the years. And you can take money out if you need to without any penalties. My biggest concern for the next few years is inflation. It will not increase my income at all but it will suck value out of my savings. So I'm saved from the stock market but likely to take a hit in the recovery. And as part of my income comes in US dollars a weaker dollar will cost me. I wish the times were a bit less "interesting".

[doc03]

4. Because your other funds were invested

in the stock market and you were well aware of the fact (Past performance is not indicative of future results). When people invest in a Treasury Fund they are not taking the risk of capital gain or loss, they are investing for income so if there is no income I can't see why they were wrong in trying to offer an alternative investment. I think you should thank them. If you don't want to take a risk in the market take your money out of the Fund and buy a CD. Join the club I lost about 25-30% of my 401k in this mess along with millions of others.

[CoffeeCat]

6. I see no problem...

...with anyone temporarily parking their money in MM funds. Given the volatility with just
about everything right now--wanting to stand on the stairwell for a while, and just take
a breather--makes total sense.

Hell, I'm worried about the insolvency of all of the banks. Is that going to blow???

Everything is so messed up and no one knows what is going to happen tomorrow, let alone
next month. We've got the entire economy hoarked up by the BushCo thugs.

Who knows what land mines they've got in place for all of us...

[customerserviceguy]

8. I don't think they get shit for commissions

on Treasury bond funds.

You should have told them that zero percent is a HELL of a lot better earnings than the funds that they were taking a fat commission on for "managing" into the ground.