A new Reuters article "Stern Advice: Don't toss that money fund out with the trash" says, "Wall Street hotshots have long disparaged money market mutual funds with a 'cash is trash' epithet. Their point: Money invested in these funds earned low returns and wasn't being put to use in more rewarding stocks and bonds. Money funds have seemed even less appealing in recent years. Their long-cherished and promoted practice of holding their share price steady at $1 got blown at the end of 2008, when the Reserve Primary Fund's inability to meet redemptions in a dysfunctional credit market caused it to drop the price to 97 cents a share. Since then, regulators and industry players have been talking about ways to make money funds more safe but, so far, most of that is still at the mulling-it-over stage." Writer Linda Stern asks, "Did I mention that money funds are now yielding between 0.03 and 0.07 percent, according to Crane Data?" They quote Publisher Peter Crane, "That means it would take between 600 and 900 years to double your money." The piece adds, "But, wait. Money market mutual funds have their purpose, and their rewards. It's just that you may have to think about them differently now than you did before." See also, Investment News' "What Eileen Rominger's appointment means for fund biz".
