Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having a mentor cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
The original Money Mark Fund in 1980's - Reserve Fund, was basically a bank account that gave limited chequing and a Debit Card (unusual in the USA) . The concept was that it could take a basic customers money and merge it with others, giving leverage to buy short investments at higher rate than an individual could on their own.
Thanks, and kudos for the way you've approached this subject - having watched other rather alarmist videos on certain other channels about this subject, it is good to have some commentary from someone with a cool head. Rather than a clickbait headline you actually answer the question you posed in a calm and considered way.
Currently my Vanguard MM is paying me 5.29%. That is over $2K per month and I'm happy with that. I'll be retiring in April of next year so I am not wanting to take much risk. If the MM payout drops below 4%, I will look at alternatives.
Not that it’s of any of my business, but if my calculations are right you should be on $4k+ per month on 1m+, not only $2k+. Either your actually invested around 500k in MM or your platform has a ridiculously high platform fee.
Very good explanation but one risk wasn't emphasized. These are equity liabilities for the issuer not debt liabilities. Debt liabilities have equity behind it to pay out in an insolvency but equity liabilities don't. Also there are no deposit guarantees by the government on these products. If you have money on deposit you have deposit protection. If you buy money market products your investment is unprotected. Deposit protection- In UK this is £85000. In US $250000 In Australia A$ 250000.
Nice segment Ramin. So, in my US Vanguard Federal Reserve MM acct, monthly interest on 100k is about $550 a month. On 100k in my checking acct, monthly div was 90 cents. Yes, that's cents, not dollars. I'm not quite ready to go back into the stock market quite yet. Have been all out for past 16 months. Waiting on a good dip in the general markets. If there is one, will certainly scale in.
I use MM funds because we are actively house hunting and we don't want to pull our money from the market after a sudden crash. If you're nervous about MM, just do an FDIC high yield savings - they are very close to MM now.
Great video as always. I admit to skipping some beats on hearing about ceti changes and the removal of ringfencing in 2022 - I believe some return to over extended lending will return. Is the current consumer boom based on depleting savings or wage rises?
Using CSH2 To hold as of This month 2 years of expenses for my planned retirement Which is in around 2-3 years Time Considering a bond ladder but I could continue working so The money market fund is more flexible hopefully it's a reasonably safe option Ps Thanks for The video
“Very high rates central banks currently setting” = Mean reverted rates…. A Run on money Market funds is exactly what happened to the Standard Life Sterling Fund in 2008/9. SL ended up putting in corporate liquidity to the fund from memory…
Thank you for another useful video Ramin. Would Money Market Funds make a sensible third fund in a 3 fund portfolio (E.g. 60% equities, 20% bonds & 20% money market funds)?
Thanks for all the great informative videos Ramin...may sound a little stupid but how long is too long in my vanguard short-term money market fund.. is 6months the sweet spot? Just when do you know the right time to pull out and find an alternative fund. depending on interest rates
This video demonstrates why PensionCraft is growing a thriving community of people keen to learn and educate themselves on how to make better-informed investment decisions .. and with access to a toolkit of high quality, informative and well-balanced content ... keep up the excellent work Ramin!
A question about Vanguard's Sterling Short-Term Money Market Fund. Is it true that the price is always £1.00 if you are investing, so £1,000 will always buy 1000 units? If so, do you get the same payout at the end of the month, no matter if you invest on the 1st of the month, or the second last day of the month?
I was listening to you through out, the word short term was repeated many times but not defined at all. I kept on waiting to hear the length of short term wàs it one, two, three months or one, two years?
Interesting timing 😅 the video is 6 days old and 4 days ago Trading 212 wrote to say from January you're only going to get interest on cash if you opt in to use qualifying money market funds 🙂
I use L&G Cash fund within tax efficient wrappers for my cash holdings approx 5% of portfolio for 3 years expenses. I think this is sensible, but appreciate any feedback?
Hi Ramin, Have been watching and enjoying your videos for a long time and am one of your biggest fans. Would appreciate it if you could do a video on TLT etf and TMF etf. Thanks a million.
UK Gilts or US T Bills? He did a video on Gilts a few months ago. Not sure about US TBs from the UK. They like to make it hard for us so that we don't make the money availble to the elites..
Im using CSH2 and single short duration governments gilts like TN24 for my short term saving in my SIPP instead of bond ETFs, its just about 10% though of my overall holdings. Thanks Ramin for explaining how to access these instruments and how they work in one of your previous videos. I have not used these as a flight to safety but rather just for short term good levels of effective and stable interest on my cash like buffer.
@@Charzhino CSH2 is tied to the SONIA rate which is a bit above 5% at the moment. It’s accumulating daily so the amount invested will tick up everyday.
Isn't holding MM funds in a "fun portfolio" an oxymoron? The only reason for holding MM funds is and has always been to avoid market volatility for access to short term cash requirements. Any other reason is just gambling as you'll discover when you notice that the other asset classes have increased in price when you cure your addiction
