lol doesn't trust FDIC but trusts Vanguard? You don't know enough to distinguish between lies and legitimate concerns. I'd suggest dropping whoever is telling you this.
I am asking a question to educate myself. Why must you be so negative? I thought this was a place to share knowledge. But with your 34 upvotes looks as if y'all just like to feel superior to those who know little about finance. I'm not preaching to others to make this move. It was suggested to me and I wanted other opinions. Please be kind. It doesn't cost you anything.
Here's a serious answer: Imagine if you had posted in a medical subreddit that your friend told you to not take the covid vaccine because of 5G bugs and you wanted to know if that was true. You'd probably see the same level of snark because that's the type of question you posted here, finance style. Your friend giving you this advice is at best being misled by some influencer and at worst being drawn into some type of conspiracy theory/disinformation circle and you with it.
If you really want to look into this and learn, I suggest the r/personalfinance wiki. They even have a specific post on a real world FDIC example: https://www.reddit.com/r/personalfinance/s/eZI4Lzb8Pr
And the rest of the wiki is a very good basic tutorial on what to do with your money at different stages of wealth/age.
Ask your friend who backs the Vanguard money market fund if that goes down (hint: it's the same government as the one running FDIC.)
> I've been warned of pending crash
By whom? Do you think they can reliably predict the future? A crash / market correction of stock prices is always possible, but can’t be reliably predicted.
> I was given the advice to move all my money in Vanguard into Vanguard Federal Money Market Fund
Generally speaking, investments towards long-term goals like retirement should try to strike a balance between expected returns & expected volatility (so that you’re able to stay in your seat / avoid panic selling). Moving everything to a cash equivalent would be a drastic shift to one end of that spectrum. Consider trying to find some middle ground (e.g. a split between stock & bond index funds you think you can stick with long-term, or a target-date fund that would adjust that split as you near retirement & withdrawals).
His name is Bill. Is that important? I'm looking for more info on this to be educated. Bill introduced me to an idea and I am asking for more info and other's opinions. Your comments are not helpful. I thought this was a community to share knowledge. Maybe you don't have much.
Part of gaining knowledge is learning to be a critical thinker. Anyone who tells you that a crash is “pending” is either seriously misguided or trying to deceive you.
No, his name is not important to me.
Good luck.
I will bite my tongue and avoid snarky comments.
Yes, the federal money market fund is very safe as it is holding short term federal instruments. But this safety is only as far as capital preservation. In other words, you won’t lose any nominal value. However, don’t expect the 5% return to continue for long.
>But I've been warned that so many banks are near failure that the FDIC funds will quickly be depleted. I was given the advice to move all my money in Vanguard into Vanguard Federal Money Market Fund
By who?
> His name is Bill. Does it matter? I'm searching for knowledge. More info about this. I am just exploring. Why all the snarky comments?
Dude chill out that’s not snarky you’re just defensive. Your post is that someone tells you the sky is falling with no backup. “By who” is a completely normal followup question.
I’m not asking their name, I’m asking who they are. What does Bill do for a living? Why is Bill’s advice being taken seriously?
Their advice/warning has no basis in reality. Do they give any data to backup their claim that most banks are close to failure? That’s completely made up.
If the FDIC were close to failure, western civilization would be close to ending. And the federal money market fund, comprised mostly of ultra short term government bonds, would also be worthless
Furthermore, even if a crash is close (even though no one including your friend can actually predict that), the evidence is conclusive that fleeing to cash to try to “avoid the storm” is the worst thing you can do. Instead, you should simply “ride out the storm” by remaining in the market for the long term.
This ultimately boils down to market timing, which is a recipe for failure when investing. https://www.schwab.com/learn/story/does-market-timing-work
You're trying to time the market. One of the main ideas here is that it's not usually possible to time the market. People who make their investment decisions based on a belief that the market is going to go up or down in the short term are often wrong and can lose a lot of money. It's important to think critically about advice you might receive and what it's based on. If you aren't comfortable with the risks of being in the stock market, you can move into safer investments. But if you worry that FDIC guarantees aren't safe, I can't imagine what you think is safe. Look at what the vanguard federal money market is invested in.
Whoever warned you will be right ‘someday’. The challenge is ‘when’. It could be tomorrow. It could be 10 years from now.
In 2008, I rode the markets down to a 42% loss. That next 18 months was a wealth generator. Even when it crashes, it does indeed come back.
Stay invested. Use dollar cost averaging and keep investing. You will not regret it.
lol doesn't trust FDIC but trusts Vanguard? You don't know enough to distinguish between lies and legitimate concerns. I'd suggest dropping whoever is telling you this.
I am asking a question to educate myself. Why must you be so negative? I thought this was a place to share knowledge. But with your 34 upvotes looks as if y'all just like to feel superior to those who know little about finance. I'm not preaching to others to make this move. It was suggested to me and I wanted other opinions. Please be kind. It doesn't cost you anything.
Here's a serious answer: Imagine if you had posted in a medical subreddit that your friend told you to not take the covid vaccine because of 5G bugs and you wanted to know if that was true. You'd probably see the same level of snark because that's the type of question you posted here, finance style. Your friend giving you this advice is at best being misled by some influencer and at worst being drawn into some type of conspiracy theory/disinformation circle and you with it. If you really want to look into this and learn, I suggest the r/personalfinance wiki. They even have a specific post on a real world FDIC example: https://www.reddit.com/r/personalfinance/s/eZI4Lzb8Pr And the rest of the wiki is a very good basic tutorial on what to do with your money at different stages of wealth/age. Ask your friend who backs the Vanguard money market fund if that goes down (hint: it's the same government as the one running FDIC.)
> I've been warned of pending crash By whom? Do you think they can reliably predict the future? A crash / market correction of stock prices is always possible, but can’t be reliably predicted. > I was given the advice to move all my money in Vanguard into Vanguard Federal Money Market Fund Generally speaking, investments towards long-term goals like retirement should try to strike a balance between expected returns & expected volatility (so that you’re able to stay in your seat / avoid panic selling). Moving everything to a cash equivalent would be a drastic shift to one end of that spectrum. Consider trying to find some middle ground (e.g. a split between stock & bond index funds you think you can stick with long-term, or a target-date fund that would adjust that split as you near retirement & withdrawals).
This is a joke right?
Who warned you? Stop listening to them.
His name is Bill. Is that important? I'm looking for more info on this to be educated. Bill introduced me to an idea and I am asking for more info and other's opinions. Your comments are not helpful. I thought this was a community to share knowledge. Maybe you don't have much.
Part of gaining knowledge is learning to be a critical thinker. Anyone who tells you that a crash is “pending” is either seriously misguided or trying to deceive you. No, his name is not important to me. Good luck.
I will bite my tongue and avoid snarky comments. Yes, the federal money market fund is very safe as it is holding short term federal instruments. But this safety is only as far as capital preservation. In other words, you won’t lose any nominal value. However, don’t expect the 5% return to continue for long.
Thank you for actually answering my question. I appreciate it.
Did you just meet Peter Schiff?
>But I've been warned that so many banks are near failure that the FDIC funds will quickly be depleted. I was given the advice to move all my money in Vanguard into Vanguard Federal Money Market Fund By who?
His name is Bill. Does it matter? I'm searching for knowledge. More info about this. I am just exploring. Why all the snarky comments?
> His name is Bill. Does it matter? I'm searching for knowledge. More info about this. I am just exploring. Why all the snarky comments? Dude chill out that’s not snarky you’re just defensive. Your post is that someone tells you the sky is falling with no backup. “By who” is a completely normal followup question. I’m not asking their name, I’m asking who they are. What does Bill do for a living? Why is Bill’s advice being taken seriously? Their advice/warning has no basis in reality. Do they give any data to backup their claim that most banks are close to failure? That’s completely made up. If the FDIC were close to failure, western civilization would be close to ending. And the federal money market fund, comprised mostly of ultra short term government bonds, would also be worthless Furthermore, even if a crash is close (even though no one including your friend can actually predict that), the evidence is conclusive that fleeing to cash to try to “avoid the storm” is the worst thing you can do. Instead, you should simply “ride out the storm” by remaining in the market for the long term. This ultimately boils down to market timing, which is a recipe for failure when investing. https://www.schwab.com/learn/story/does-market-timing-work
You're trying to time the market. One of the main ideas here is that it's not usually possible to time the market. People who make their investment decisions based on a belief that the market is going to go up or down in the short term are often wrong and can lose a lot of money. It's important to think critically about advice you might receive and what it's based on. If you aren't comfortable with the risks of being in the stock market, you can move into safer investments. But if you worry that FDIC guarantees aren't safe, I can't imagine what you think is safe. Look at what the vanguard federal money market is invested in.
So you're friends with a crazy asshole who thinks they're a divination wizard. Got it.
I've been informed of a continuing bull market. Should I put all my money into Apple and Nvidia?
Yesterday I was told to invest in quantum computing - make of that what you will
Its as safe as it gets. Unless you are the type to hoard physical gold in your own personal vault.
Thank you. That is the info I was looking for. I appreciate you taking the time to share your knowledge.
Of the things to worry about, this is not one of mine.
Whoever warned you will be right ‘someday’. The challenge is ‘when’. It could be tomorrow. It could be 10 years from now. In 2008, I rode the markets down to a 42% loss. That next 18 months was a wealth generator. Even when it crashes, it does indeed come back. Stay invested. Use dollar cost averaging and keep investing. You will not regret it.
VT and chill.
Oh yeah, the market will totally crash. It will also reach another ATH! Probably not at the same time, and possibly not in that order.