Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Is your money market safe?

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I figured that before this debt and credit addition is all said and done, we’re going to have notable corporate bankruptcies. I just didn’t think we’d get one so quickly.

Is your money market account safe? A large money market provider in Chicago filed for bankruptcy late last Friday after its big bets went awry.

Ask your broker these questions (copy and paste if you want):

“As soon as possible, please reply in writing to my address of record to these questions:

1) Is my sweep settlement account a money market fund or a money market demand account? Is it insured by SIPC or FDIC? What limits apply?

2) Has the investment adviser, investment manager, or principal for my money market fund or sweep settlement account ever defaulted or “broke the buck” on a money market fund?

3) Does the duration of investments within the money market fund match that investment objectives of the fund.

4) Have you heard any information as to the safety of my money market?

5) Is there a course of action you would recommend?

Thank you for your prompt attention to this important matter.”

If your broker doesn’t respond immediately with the answers, he’s either
a) hiding under his desk counting the gold doubloons;
b) ducking your question;
c) doesn’t know;
d) doesn’t WANT to know; or
e) in Vegas at a sales contest victory party.

By the way, your broker’s first inclination will be (because of human nature) to crap his pants and wonder himself, is his own money market safe? When he finds that out that answer, he will gladly let you know.

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Written by heyercapital

August 20, 2007 at 9:56 am

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