VMMXX: Finally Pulled the Trigger

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
john94549
Posts: 4638
Joined: Tue Jul 26, 2011 8:50 pm

VMMXX: Finally Pulled the Trigger

Post by john94549 » Mon Jul 21, 2014 8:16 pm

After years and years of maintaining a modest residue of VMMXX, I finally transferred the last tranche (a little over $10, 474) to VBIAX. I suspect I am one of the last dinosaurs to fully abandon Vanguard's MMF.

User avatar
Tycoon
Posts: 1098
Joined: Wed Mar 28, 2012 7:06 pm

Re: VMMXX: Finally Pulled the Trigger

Post by Tycoon » Mon Jul 21, 2014 8:19 pm

You're not the last one to pull the trigger. We have more money than I care to admit in VMMXX.
...I might be just beginning | I might be near the end. Enya | | C'est la vie

john94549
Posts: 4638
Joined: Tue Jul 26, 2011 8:50 pm

Re: VMMXX: Finally Pulled the Trigger

Post by john94549 » Mon Jul 21, 2014 8:32 pm

It's not a "what took you so long" issue, as I've been moving money from VMMXX to other investments since rates peaked in late 2006. Needless to say, every transfer (whether to IRA CD, Vanguard fund, you name it) has done better than VMMXX. Behavioral economists would have a field day as to why I kept "a bit" in VMMXX. Personally, I have no clue.

peppers
Posts: 1277
Joined: Tue Oct 25, 2011 7:05 pm

Re: VMMXX: Finally Pulled the Trigger

Post by peppers » Mon Jul 21, 2014 8:43 pm

Perhaps DABDA

Denial
Anger
Bargaining
Depression
Acceptance
"..the cavalry ain't comin' kid, you're on your own..."

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: VMMXX: Finally Pulled the Trigger

Post by sscritic » Mon Jul 21, 2014 8:58 pm

I thought lots of bogleheads don't like to reinvest dividends; instead they send the dividends to Prime Money Market. What is happening to all your dividends? Are you sending them to Balanced Index Fund Admiral?

P.S. I am a dinosaur. I have Prime and I reinvest dividends.

JDDS
Moderator
Posts: 916
Joined: Sun Mar 16, 2014 2:24 pm

Re: VMMXX: Finally Pulled the Trigger

Post by JDDS » Mon Jul 21, 2014 9:02 pm

sscritic wrote:I thought lots of bogleheads don't like to reinvest dividends; instead they send the dividends to Prime Money Market.


I do that in taxable. I admit that I still have June's dividends sitting there.

I'm also strange. When making a contribution, I prefer to make the initial purchase in VMMXX, then do exchanges from there.

User avatar
joe8d
Posts: 4247
Joined: Tue Feb 20, 2007 8:27 pm
Location: Buffalo,NY

Re: VMMXX: Finally Pulled the Trigger

Post by joe8d » Mon Jul 21, 2014 9:06 pm

P.S. I am a dinosaur. I have Prime and I reinvest dividends.sscritic


Same here. Keep just enough to keep account open and have all dividends reinvested.
All the Best, | Joe

Calm Man
Posts: 2917
Joined: Wed Sep 19, 2012 9:35 am

Re: VMMXX: Finally Pulled the Trigger

Post by Calm Man » Mon Jul 21, 2014 9:07 pm

What's wrong with keeping cash in a money market?

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: VMMXX: Finally Pulled the Trigger

Post by sscritic » Mon Jul 21, 2014 10:01 pm

JDDS wrote:I'm also strange. When making a contribution, I prefer to make the initial purchase in VMMXX, then do exchanges from there.

I used to do that all the time. Actually, I would pre-buy: send money to Prime Money and then wait a few days to pull the trigger. Now that you can do same day buys with an electronic transfer from your bank, it doesn't make sense any more, but it used to.

placeholder
Posts: 3954
Joined: Tue Aug 06, 2013 12:43 pm

Re: VMMXX: Finally Pulled the Trigger

Post by placeholder » Tue Jul 22, 2014 12:36 am

Calm Man wrote:What's wrong with keeping cash in a money market?

SEC yield as of 07/18/2014: 0.01%

stlutz
Posts: 4024
Joined: Fri Jan 02, 2009 1:08 am

Re: VMMXX: Finally Pulled the Trigger

Post by stlutz » Tue Jul 22, 2014 12:52 am

I thought lots of bogleheads don't like to reinvest dividends; instead they send the dividends to Prime Money Market. What is happening to all your dividends? Are you sending them to Balanced Index Fund Admiral?


I send them to my bank. Moving money between my bank and VG is simply much easier than it was back in the age of the dinosaurs.

2008 showed that prime money market funds are less safe than we thought. I don't think we can count on government intervention to save them the way we all did back in '08.

User avatar
potatoman
Posts: 92
Joined: Fri May 30, 2014 8:41 pm

Re: VMMXX: Finally Pulled the Trigger

Post by potatoman » Tue Jul 22, 2014 1:04 am

JDDS wrote:I'm also strange. When making a contribution, I prefer to make the initial purchase in VMMXX, then do exchanges from there.


I've been doing this also; didn't realize it wasn't normal. I just opened two accounts with vanguard in june and july.

Regarding the initial transfer in to vmmxx: I noticed that vmmxx stayed on my account statement for the month of june even though it has a zero balance. Do all funds we buy at vanguard remain on the monthly statement as a sort of history even if the balance is zero at the end of month - or it is on my statement because there was activity in that fund during the month?

User avatar
pjstack
Posts: 1308
Joined: Tue Feb 20, 2007 5:03 am
Location: Harbor City, CA

Re: VMMXX: Finally Pulled the Trigger

Post by pjstack » Tue Jul 22, 2014 1:14 am

potatoman wrote: Do all funds we buy at vanguard remain on the monthly statement as a sort of history even if the balance is zero at the end of month - or it is on my statement because there was activity in that fund during the month?


Yes, zero balance accounts still appear. My account still shows a zero balance for an investment (VTSAX) I had in my name only (before I switched to joint ownership). It's been at least a couple of years now.
pjstack

JDDS
Moderator
Posts: 916
Joined: Sun Mar 16, 2014 2:24 pm

Re: VMMXX: Finally Pulled the Trigger

Post by JDDS » Tue Jul 22, 2014 9:50 am

placeholder wrote:
Calm Man wrote:What's wrong with keeping cash in a money market?

SEC yield as of 07/18/2014: 0.01%


There's $129 billion In PrimeMM, $101 billion in the VMMXX share class.

placeholder
Posts: 3954
Joined: Tue Aug 06, 2013 12:43 pm

Re: VMMXX: Finally Pulled the Trigger

Post by placeholder » Tue Jul 22, 2014 10:01 am

JDDS wrote:There's $129 billion In PrimeMM, $101 billion in the VMMXX share class.

Meaning it's not all sweep accounts and such which gets back to why given the almost zero yield and lack of FDIC protection and I think it comes down to inertia and/or lack of a suitable option for keeping cash amounts.

User avatar
SteelyEyed
Posts: 278
Joined: Sun Jun 14, 2009 10:34 am

Re: VMMXX: Finally Pulled the Trigger

Post by SteelyEyed » Tue Jul 22, 2014 10:16 am

sscritic wrote:I thought lots of bogleheads don't like to reinvest dividends; instead they send the dividends to Prime Money Market. What is happening to all your dividends? Are you sending them to Balanced Index Fund Admiral?

P.S. I am a dinosaur. I have Prime and I reinvest dividends.



VMMXX? I use VMSXX (tax-exempt money market) for my dividends, interest, and sweep in taxable. I'm not paying taxes on my ~$1 of interest! :o

RadAudit
Posts: 2676
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: VMMXX: Finally Pulled the Trigger

Post by RadAudit » Tue Jul 22, 2014 10:28 am

John, thanks for the post.

Just like a number of the threads on the site, yours leads me to look at my portfolio and wonder why am I doing THAT :oops: (Whatever that is at the moment).

Maybe I should move money from VMMXX to a short term bond fund while I wait for a planned short term need to appear. Sometimes these things do take longer than anticipated to materialize, and if it isn't going to be FDIC insured, maybe the additional risk should be compensated. At least it's something to mull over.
FI is the best revenge. LBYM. Invest the rest. Stay the course.

User avatar
rustymutt
Posts: 3657
Joined: Sat Mar 07, 2009 12:03 pm
Location: Oklahoma

Re: VMMXX: Finally Pulled the Trigger

Post by rustymutt » Tue Jul 22, 2014 3:20 pm

VMMXX is where all of our dividends and capital gains go. I use that build up to rebalance funds that don't match my IPS.
Can also send that money to one of our banks. It's the fund I use as a tool, and it's used as a part of my portfolio.
If to much money ends up in it, I move that to corp short term bond fund, til I'm ready to use it. :sharebeer
Knowledge is knowing that the Tomato is a fruit. Wisdom is knowing better than to put the tomato in a fruit salad.

Angelus359
Posts: 766
Joined: Tue Mar 04, 2014 12:56 am

Re: VMMXX: Finally Pulled the Trigger

Post by Angelus359 » Wed Jul 23, 2014 9:28 am

I have 26$ in the money market fund. Etf trading
IT-DevOps System Administrator

john94549
Posts: 4638
Joined: Tue Jul 26, 2011 8:50 pm

Re: VMMXX: Finally Pulled the Trigger

Post by john94549 » Wed Jul 23, 2014 8:13 pm

So far, so good. Made a tad over ten bucks on the buy (362 shares of VBIAX) in just one day. Goshamighty, that's beer money. Had I not sat on the funds last year (having moved some, but not all), it might have been cases-of-wine money.

That said, had markets tanked, it might have been . . ., well, you get the drift. Too much fun.

Frugalman
Posts: 34
Joined: Tue May 13, 2014 11:05 pm

Re: VMMXX: Finally Pulled the Trigger

Post by Frugalman » Wed Jul 23, 2014 8:33 pm

john94549 wrote:After years and years of maintaining a modest residue of VMMXX, I finally transferred the last tranche (a little over $10, 474) to VBIAX. I suspect I am one of the last dinosaurs to fully abandon Vanguard's MMF.



john94549,

Newbee here, please help me out on this thought process. Are you using VBIAX (Balanced Fund: 60% stocks/40% bonds) as a comparable substitute for VMMXX (Money Market account)? I realize the MM is making a pittance, but isn't that the tradeoff for the (relative) security of the MM vs. the Balanced Fund?

jj987
Posts: 83
Joined: Mon Nov 19, 2007 4:13 pm

Re: VMMXX: Finally Pulled the Trigger

Post by jj987 » Sun Oct 12, 2014 10:26 am

Been a reader for years. I many moons ago was in the ING 4% or more online savings. I then moved to Prime MM as a "middle man" to hold my $ before I went on to buy other things (also had a good return for those who remember). Since the fall of rates my Prime MM is a hold over for me I have been using out of habit (serve me well enough all through grad school). Now that I am working again and really it is crazy easy to just buy directly from my checking account, I see no reason to latch on to Prime MM. I will use what is left in my Prime MM to fund my Roth, and close out this year. I one will switch to Ally to serve as my emergency/holding account.

Thanks Prime MM for all the countless nights you were my "middle man."

User avatar
nisiprius
Advisory Board
Posts: 34331
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: VMMXX: Finally Pulled the Trigger

Post by nisiprius » Sun Oct 12, 2014 10:35 am

Too darn much in VMMXX. I am in analysis paralysis and tell myself it's OK because it's a relatively small amount. If I can't decide to reinvest it, I ought to bite the bullet and find out how rollover IRAs work at the select list of two banks I already have accounts at. Or withdraw it, pay the taxes, and spend it. (I don't need advice, like Alice in Wonderland I give myself very good advice but I very seldom follow it. I think I'll just let it go for another month... or two... or three.... :) )
Last edited by nisiprius on Sun Oct 12, 2014 10:36 am, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Mark2614
Posts: 153
Joined: Mon Sep 08, 2014 10:53 pm

Re: VMMXX: Finally Pulled the Trigger

Post by Mark2614 » Sun Oct 12, 2014 10:35 am

Why do people keep money in the money market fund when there are FDIC insured online bank accounts that are giving almost 1% interest today? I don't get it.

User avatar
SpringMan
Posts: 5310
Joined: Wed Mar 21, 2007 11:32 am
Location: Michigan

Re: VMMXX: Finally Pulled the Trigger

Post by SpringMan » Sun Oct 12, 2014 11:09 am

Mark2614 wrote:Why do people keep money in the money market fund when there are FDIC insured online bank accounts that are giving almost 1% interest today? I don't get it.

When it comes to IRA money, I think it is too much hassle. Not everyone wants an IRA with a bank just to gain access to FDIC insurance.
Best Wishes, SpringMan

Mark2614
Posts: 153
Joined: Mon Sep 08, 2014 10:53 pm

Re: VMMXX: Finally Pulled the Trigger

Post by Mark2614 » Sun Oct 12, 2014 11:12 am

SpringMan wrote:
Mark2614 wrote:Why do people keep money in the money market fund when there are FDIC insured online bank accounts that are giving almost 1% interest today? I don't get it.

When it comes to IRA money, I think it is too much hassle. Not everyone wants an IRA with a bank just to gain access to FDIC insurance.


Oh I see -- we are referring to money that's already been deposited into an IRA.

User avatar
TheGreyingDuke
Posts: 1380
Joined: Fri Sep 02, 2011 10:34 am

Re: VMMXX: Finally Pulled the Trigger

Post by TheGreyingDuke » Sun Oct 12, 2014 11:22 am

I am in the deaccumulation stage, send all the dividends to local credit union where I spend it. :happy

This does not work for the few ETFs I have, they do go to the sweep and I need to remind myself to empty it out. Not buying them anymore and while you can convert from Admiral to ETF with no tax consequence, this is not true for conversions in the other direction.

The complete setup links Vanguard, local credit union and CIT bank where I have a "High" interest" savings account. Mostly live off the dividends, interest, and, maturing CDs.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

User avatar
SpringMan
Posts: 5310
Joined: Wed Mar 21, 2007 11:32 am
Location: Michigan

Re: VMMXX: Finally Pulled the Trigger

Post by SpringMan » Sun Oct 12, 2014 11:25 am

Mark2614 wrote:
SpringMan wrote:
Mark2614 wrote:Why do people keep money in the money market fund when there are FDIC insured online bank accounts that are giving almost 1% interest today? I don't get it.

When it comes to IRA money, I think it is too much hassle. Not everyone wants an IRA with a bank just to gain access to FDIC insurance.


Oh I see -- we are referring to money that's already been deposited into an IRA.

There is a case to be made for moving taxable funds to a bank that has FDIC insurance and pays better rates. My spouse once had an IRA through Comerica bank, FDIC account was an option and also so were many expensive mutual funds. They also had an annual $75 charge for the privilege. Not sure what charge if any bank IRAs have today. She rolled it over to Vanguard and could not be happier. I would never personally consider moving IRA money to a bank but I do realize several posters here use Wells Fargo and are apparently happy with it.
Best Wishes, SpringMan

Jazz56
Posts: 52
Joined: Thu Jun 19, 2014 10:19 am

Re: VMMXX: Finally Pulled the Trigger

Post by Jazz56 » Sun Oct 12, 2014 11:36 am

pjstack wrote:
potatoman wrote: Do all funds we buy at vanguard remain on the monthly statement as a sort of history even if the balance is zero at the end of month - or it is on my statement because there was activity in that fund during the month?


Yes, zero balance accounts still appear. My account still shows a zero balance for an investment (VTSAX) I had in my name only (before I switched to joint ownership). It's been at least a couple of years now.


You can go into the account settings page to hide all accounts with a "0" balance. I use it so the summary account pages are not so cluttered. You can get to the settings by clicking on the "Customize This Page" link on your Balances and Holdings page.

User avatar
White Coat Investor
Posts: 12907
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: VMMXX: Finally Pulled the Trigger

Post by White Coat Investor » Sun Oct 12, 2014 5:56 pm

Don't feel badly. I beat you by a few years, but keep in mind I went from Prime which pays nothing to Ally Bank which pays 0.85% or so. Not much difference.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

Post Reply