Quote:
Originally Posted by queasy27
I know almost nothing about investing, so please be gentle.
My 401k portfolio is invested exclusively in mutual funds. About 10 years ago and close to retirement I got very nervous about losses and fluctuations in my portfolio and moved everything into a money market fund. Yes, yes, I know. But it gave me peace of mind.
I expected almost no dividends and that's what I got; perhaps a dollar or two every quarter. The fund remained that way for quite a while, but at the end of 2016 I suddenly started seeing some minor returns. It was maybe $30 at first but has gone up consistently every quarter since then until this quarter was almost $700 reinvested.
So what has changed in the market? It's USAXX, if that matters.
Thanks.
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Money market funds invest in safe short term bonds and credit what they earn (after fees, which should be very low). A good gauge of what a money market fund should be earning is the current yield on a one month Unites States Treasury bill. The current yield is about 1.92%, which is about as high as it has been in years. Ever since the 2008 market crash, short term T-Bill rates have been close to zero, but have been increasing lately.