WSJ's "In Stashing Cash, Look Ahead"
Friday's Wall Street Journal writes "In Stashing Cash, Look Ahead". It says, "The returns on low-risk savings these days range from just about zilch to a little more than nothing. With interest rates at rock bottom, money-market funds, bank accounts and ultrashort-debt funds have been cranking out uniformly terrible returns. But investors should remember a crucial fact: Rates won't stay low forever. And when they rise, low-risk vehicles may turn in very different results, since they have very different structures and investment philosophies. In looking at the various options, investors "should think about how they will perform with certain interest-rate changes," says Allan Roth, a financial adviser in Colorado Springs, Colo. Many economists believe in the first half of next year the Fed will start raising short-term interest rates from its current target range of 0% to 0.25%. And when the Fed does start raising rates, that might mean "hikes as far as the eye can see," says Peter Crane, president of Crane Data LLC, which tracks money funds. Between June 2004 and June 2006, the Fed's rate-setting committee boosted its target rate at 17 consecutive meetings. Here's a look at four low-risk alternatives for savings and how they could be affected by the next increase in rates...." Friday's Journal also featured "Should Investors Worry About Money Funds?", which featured the "con" opinion piece, "Why Investors Should Worry About Money Funds" and the "pro," "Why Investors Shouldn't Worry About Money Funds". Finally, see the press release, "Stradley Ronon Attorney to Speak at Crane's Money Fund Symposium."
