Get Around 5% on Fidelity’s Treasury Money Market

April 8, 2024 By E.J. Smith - Your Survival Guy

By Syda Productions @ Adobe Stock

If you like getting close to 5% on your money markets, then check out Fidelity’s Treasury Money Market. Remember, even if the Fed cuts rates, it may take a while, and you might be surprised at how it unfolds. Farah Elbahrawy reports for Bloomberg:

Investors are still flocking to cash funds, and Bank of America Corp. strategists say history suggests redemptions won’t begin until a year after the Federal Reserve starts cutting interest rates.

Money-market fund flows rose in anticipation of the first cut over the past five rate reduction cycles, before inflows slowed meaningfully when the central bank actually started cutting rates, a team led by Michael Hartnett wrote in a note. Outflows began 12 months later, they said.

Investors are still in the phase of pouring into cash funds, which received $82 billion in the week through Wednesday, according to the BofA strategists who cited EPFR Global data. Money-market funds are annualizing $1.2 trillion of inflows, the second highest ever.

Cash funds have been seeing massive inflows for several months, far above other asset classes like equities, showing investors likely missed out on the S&P 500’s 34% rally since the start of 2023.

Action Line: Be smart with your lazy cash. Get it off the couch and put it to work for you. When you want to talk about how to do it, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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