Money Hungry

E-Book

FIND OUT:Is the fund a general short-term commercial paper fund, a gov't securities fund or a tax-free money market fund? Remember you are loaning money to these companies.

ASK: What's the current yield?
SMART ANS: About the same as other similar funds. If the yield is higher, it may be higher risk commercial paper or securities with longer maturities. Check
it out----

ASK: Is it federally Insured?
SMART ANS: No, brokerage houses do not insure them. Some bank MM insured up to $100,000 but yields are usually about .5% to 1% under brokerage MM funds.

ASK: What's the minimum investment amount?
SMART ANS: Usually $500 -$1000. Unit value is $1, but it is NOT a guaranteed value.

ASK: What's the minimum check I can write at any one time?
SMART ANS: Depends on the bank, brokerage house or credit union. Make sure you can get it out any time.

ASK: Where can I find ratings on the fund?
SMART ANS: Standard and Poors rates the MM Funds. An AAAm would mean the highest rating.

Online go to Standard and Poor's http://www2.standardandpoors.com

ASK: Is the fund invested in marketable municipalities? Are the municipalities well rated or will they default on their loans? Check it out.
Smart Ans: Yes, it's diversified and exempt from income tax with well rated municipalities.

Government Securities Money Market Funds

Ask: Why put money in a Gov't MM Fund?
Smart Ans: It's usually safer than a commercial MM fund because it contains securities backed by the US gov't.

Ask: Is it yielding higher than other Gov't MM Funds?
Smart Ans: If it's higher it may be using "repos"(a complicated type of instrument) increasing the risk

Ask: Are the gov't funds federally insured?
Ans: No, the brokerage packaged funds sold directly to the public are not insured.