Vanguard Prime Money Market Fund

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abuss368
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Vanguard Prime Money Market Fund

Post by abuss368 »

Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard Prime Money Market Fund

Post by Kenkat »

I’ve moved most of what was in Prime MM to an online savings account to get a better yield. That is a better alternative in my opinion than any of the Vanguard MM funds in the current rate environment.
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Re: Vanguard Prime Money Market Fund

Post by L82GAME »

Kenkat wrote: Tue Jul 07, 2020 11:02 am I’ve moved most of what was in Prime MM to an online savings account to get a better yield. That is a better alternative in my opinion than any of the Vanguard MM funds in the current rate environment.
+1 and CDs
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Re: Vanguard Prime Money Market Fund

Post by Vanguard Fan 1367 »

.17% is what Vanguard’s website just said Prime’s giving for an SEC yield.
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Re: Vanguard Prime Money Market Fund

Post by sycamore »

L82GAME wrote: Tue Jul 07, 2020 11:08 am
Kenkat wrote: Tue Jul 07, 2020 11:02 am I’ve moved most of what was in Prime MM to an online savings account to get a better yield. That is a better alternative in my opinion than any of the Vanguard MM funds in the current rate environment.
+1 and CDs
+1 to online savings (with account sign-up bonus) and CDs
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

L82GAME wrote: Tue Jul 07, 2020 11:08 am
Kenkat wrote: Tue Jul 07, 2020 11:02 am I’ve moved most of what was in Prime MM to an online savings account to get a better yield. That is a better alternative in my opinion than any of the Vanguard MM funds in the current rate environment.
+1 and CDs
+1. I am using no penalty CDs, so still have liquidity.
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Re: Vanguard Prime Money Market Fund

Post by Ferdinand2014 »

abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
My entire fixed income/cash was in 1 month treasury bills bought at auction on auto-roll for free from Fidelity. When yields went briefly negative, I was kicked off auto roll and required call to purchase. I have since switched all of my fixed income/cash to FUMBX (Fidelity short term treasury index fund) expense ratio .03. Duration about 2.3 years. I am now into rarified air of holding more than one mutual fund in my entire portfolio. FXAIX (Fidelity 500 index) expense ratio .015 being the other. It makes my head spin with complication. Any more and I’d need Xanax. :D
Last edited by Ferdinand2014 on Tue Jul 07, 2020 11:32 am, edited 1 time in total.
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Re: Vanguard Prime Money Market Fund

Post by IHeartTaylor1 »

I also went the Savings account route. I considered an Ultra Short Term Bond Fund but I needed 100% principal security.
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Re: Vanguard Prime Money Market Fund

Post by rkhusky »

Not considering moving, but I only keep a few months worth of bills in PMM. I don't really care about missing the small amount of interest - ease of use is more important. I automatically transfer a set amount to my checking account each month.
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Re: Vanguard Prime Money Market Fund

Post by 1789 »

No I am not doing any change. I would do if i had a million in there thou.
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Re: Vanguard Prime Money Market Fund

Post by cobra911 »

Several have stated: "+1 to online savings (with account sign-up bonus) and CDs"

So ... What is the best current Online Savings and/or Checking bonus offers out there now??

Thanks
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Re: Vanguard Prime Money Market Fund

Post by abuss368 »

Ferdinand2014 wrote: Tue Jul 07, 2020 11:28 am
abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
My entire fixed income/cash was in 1 month treasury bills bought at auction on auto-roll for free from Fidelity. When yields went briefly negative, I was kicked off auto roll and required call to purchase. I have since switched all of my fixed income/cash to FUMBX (Fidelity short term treasury index fund) expense ratio .03. Duration about 2.3 years. I am now into rarified air of holding more than one mutual fund in my entire portfolio. FXAIX (Fidelity 500 index) expense ratio .015 being the other. It makes my head spin with complication. Any more and I’d need Xanax. :D
Now that was priceless!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard Prime Money Market Fund

Post by abuss368 »

The focus of my questions is aimed more at the RISK of Prime Money Market fund more so than the lower interest rate!

Not yield shopping but rather is Federal Money Market (or another money market) less risk than Prime Money Market.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

rkhusky wrote: Tue Jul 07, 2020 12:00 pm Not considering moving, but I only keep a few months worth of bills in PMM. I don't really care about missing the small amount of interest - ease of use is more important. I automatically transfer a set amount to my checking account each month.
Sounds like something you could easly set up with any online savings account...
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anon_investor
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

abuss368 wrote: Tue Jul 07, 2020 12:32 pm The focus of my questions is aimed more at the RISK of Prime Money Market fund more so than the lower interest rate!

Not yield shopping but rather is Federal Money Market (or another money market) less risk than Prime Money Market.
I would consider Vanguard's Prime Money Market Fund effectively risk free because the Federal Reserve Bank set up a Money Market Mutual Fund Liquidity Facility:
(https://www.federalreserve.gov/monetarypolicy/mmlf.htm)

But personally, I pulled all my money out of money market funds and moved it all to FDIC insured accounts where I can get significant'y better rates.
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Re: Vanguard Prime Money Market Fund

Post by sycamore »

cobra911 wrote: Tue Jul 07, 2020 12:10 pm Several have stated: "+1 to online savings (with account sign-up bonus) and CDs"

So ... What is the best current Online Savings and/or Checking bonus offers out there now??

Thanks
About a month ago Capital One had a sign-up bonus that I used but I think it's expired now. One resource for finding current bank bonuses is https://www.doctorofcredit.com/best-ban ... t-bonuses/. Note that many/most require a direct deposit to qualify.

I used https://www.depositaccounts.com/blog/cd-rates-survey/ to look for best current CD rates.
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Re: Vanguard Prime Money Market Fund

Post by garlandwhizzer »

Yields on all short duration quality fixed income have been devastated by the FED 0 - 0.25% rate policy. FED policy sets short rates, has somewhat less influence on long rates. With such incredibly low rates, essentially zero, in very short term instruments, the difference in yields isn't going to put a lot of money in anyone's pocket by choosing one option versus another. If you want a modest improvement in yield you either have to accept longer duration which has its own risk (inflation/rising rates) and/or default risk (corporates). Nothing in quality fixed income at present is expected to outperform inflation going forward and many may underperform inflation producing negative real yields which is what TIPS offer now. The FED is pushing investors away from fixed income and toward risk assets attempting to prevent worse things from happening by choosing the lesser of two evils as they see it.

Garland Whizzer
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Re: Vanguard Prime Money Market Fund

Post by Big Dog »

I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
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Re: Vanguard Prime Money Market Fund

Post by 1789 »

abuss368 wrote: Tue Jul 07, 2020 12:31 pm
Ferdinand2014 wrote: Tue Jul 07, 2020 11:28 am
abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
My entire fixed income/cash was in 1 month treasury bills bought at auction on auto-roll for free from Fidelity. When yields went briefly negative, I was kicked off auto roll and required call to purchase. I have since switched all of my fixed income/cash to FUMBX (Fidelity short term treasury index fund) expense ratio .03. Duration about 2.3 years. I am now into rarified air of holding more than one mutual fund in my entire portfolio. FXAIX (Fidelity 500 index) expense ratio .015 being the other. It makes my head spin with complication. Any more and I’d need Xanax. :D
Now that was priceless!
Hahah
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Re: Vanguard Prime Money Market Fund

Post by Dave55 »

abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
I am using Vanguard Ultra Short Bond Fund in place of money market. 30 day SEC Yield is 1.27%.

Dave
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

Dave55 wrote: Tue Jul 07, 2020 1:02 pm
abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
I am using Vanguard Ultra Short Bond Fund in place of money market. 30 day SEC Yield is 1.27%.

Dave
Curious, how did that fund do during the March crash?
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Re: Vanguard Prime Money Market Fund

Post by Big Dog »

anon_investor wrote: Tue Jul 07, 2020 1:06 pm
Dave55 wrote: Tue Jul 07, 2020 1:02 pm
abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
I am using Vanguard Ultra Short Bond Fund in place of money market. 30 day SEC Yield is 1.27%.

Dave
Curious, how did that fund do during the March crash?
The Ultra declined 1.3% and the Short-term declined 1.9%.
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Re: Vanguard Prime Money Market Fund

Post by Dave55 »

anon_investor wrote: Tue Jul 07, 2020 1:06 pm
Dave55 wrote: Tue Jul 07, 2020 1:02 pm
abuss368 wrote: Tue Jul 07, 2020 10:49 am Bogleheads -

With the unprecedented stimulus, the Federal Reserve stepped in to support and backstop Prime Money Market funds during Corona.

As a result, is the Federal Money Market with Vanguard (which is Vanguard's default money market fund for their brokerage offering) a better alternative as it may have higher Treasuries? The Treasury money market is closed.

Is anyone considering a new money market fund or a short or limited term bond fund in place of a money market with rates near zero?
I am using Vanguard Ultra Short Bond Fund in place of money market. 30 day SEC Yield is 1.27%.

Dave
Curious, how did that fund do during the March crash?
approx. -1.4%

Dave
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Re: Vanguard Prime Money Market Fund

Post by Jeff Albertson »

deleted
Last edited by Jeff Albertson on Tue Jul 07, 2020 6:49 pm, edited 1 time in total.
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Re: Vanguard Prime Money Market Fund

Post by rkhusky »

anon_investor wrote: Tue Jul 07, 2020 12:32 pm
rkhusky wrote: Tue Jul 07, 2020 12:00 pm Not considering moving, but I only keep a few months worth of bills in PMM. I don't really care about missing the small amount of interest - ease of use is more important. I automatically transfer a set amount to my checking account each month.
Sounds like something you could easly set up with any online savings account...
But that would require more effort than I am willing to make for the small amount of additional interest.
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

rkhusky wrote: Tue Jul 07, 2020 1:32 pm
anon_investor wrote: Tue Jul 07, 2020 12:32 pm
rkhusky wrote: Tue Jul 07, 2020 12:00 pm Not considering moving, but I only keep a few months worth of bills in PMM. I don't really care about missing the small amount of interest - ease of use is more important. I automatically transfer a set amount to my checking account each month.
Sounds like something you could easly set up with any online savings account...
But that would require more effort than I am willing to make for the small amount of additional interest.
I can understand that if it is not a lot of money. But on even $10k, and extra 1% of interest is $100/yr. I know a lot of Bogleheads likely have a lot more than that in "cash".
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Re: Vanguard Prime Money Market Fund

Post by rkhusky »

anon_investor wrote: Tue Jul 07, 2020 1:45 pm
I can understand that if it is not a lot of money. But on even $10k, and extra 1% of interest is $100/yr. I know a lot of Bogleheads likely have a lot more than that in "cash".
$10K is close to my average balance. I am not interested in jumping through hoops for $100/yr that might disappear in less than a year.
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Re: Vanguard Prime Money Market Fund

Post by Broken Man 1999 »

I hold so little money in any MM fund the interest rate does't really matter. My MMF is just a portal to between my credit union and Vanguard.

When Vanguard made Vanguard Federal Money Market mf the sweep account, I exited all our Vanguard Prime Money Market mf to reduce number of holdings.

Vanguard Federal Money Market Mutual Fund

Principal Investment Strategies
The Fund invests primarily in high-quality, short-term money market instruments.
Under normal circumstances, at least 80% of the Fund’s assets are invested in
securities issued by the U.S. government and its agencies and instrumentalities.
Although these securities are high-quality, most of the securities held by the Fund are
neither guaranteed by the U.S. Treasury nor supported by the full faith and credit of
the U.S. government. To be considered high quality, a security must be determined by
Vanguard to present minimal credit risk based in part on a consideration of maturity,
portfolio diversification, portfolio liquidity, and credit quality. The Fund maintains a
dollar-weighted average maturity of 60 days or less and a dollar-weighted average life
of 120 days or less.
Government money market funds are required to invest at least 99.5% of their total
assets in cash, U.S. government securities, and/or repurchase agreements that are
collateralized solely by U.S. government securities or cash (collectively, government
securities). The Fund generally invests 100% of its assets in government securities
and therefore will satisfy the 99.5% requirement for designation as a government
money market fund


Vanguard Prime Money Market

Principal Investment Strategies
The Fund invests primarily in high-quality, short-term money market instruments,
including certificates of deposit, banker’s acceptances, commercial paper, Eurodollar
and Yankee obligations, and other money market securities. To be considered high
quality, a security must be determined by Vanguard to present minimal credit risk
based in part on a consideration of maturity, portfolio diversification, portfolio liquidity,
and credit quality. The Fund invests more than 25% of its assets in securities issued
by companies in the financial services industry. The Fund maintains a dollar-weighted
average maturity of 60 days or less and a dollar-weighted average life of 120 days or less


OP, yes, Vanguard Federal Money Market Mutual Fund is safer.

However, Vanguard Prime Money Market Mutual Fund is also safe. I use only the Vanuard Federal Money Market Mutual Fund because I prefer fewer holdings.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

rkhusky wrote: Tue Jul 07, 2020 1:49 pm
anon_investor wrote: Tue Jul 07, 2020 1:45 pm
I can understand that if it is not a lot of money. But on even $10k, and extra 1% of interest is $100/yr. I know a lot of Bogleheads likely have a lot more than that in "cash".
$10K is close to my average balance. I am not interested in jumping through hoops for $100/yr that might disappear in less than a year.
Lucky for me I already had an online high yield savings account, so it was just a matter of a few mouse clicks.
retire57
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Re: Vanguard Prime Money Market Fund

Post by retire57 »

We've moved from our long-held Prime MM to a Short-term Bond ETF (BSV).
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Re: Vanguard Prime Money Market Fund

Post by Van »

A couple of months ago I moved a part of my money in Prime MM and Municipal MM into the Ultra Short Term Bond fund. So far, so good, but my time frame is very short, and I'm uncertain how I will view this move as time marches on.
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Re: Vanguard Prime Money Market Fund

Post by fsrph »

Kenkat wrote: Tue Jul 07, 2020 11:02 am I’ve moved most of what was in Prime MM to an online savings account to get a better yield. That is a better alternative in my opinion than any of the Vanguard MM funds in the current rate environment.
I did the same. Moved most of my Prime MM funds to Ally.

Francis
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Re: Vanguard Prime Money Market Fund

Post by dewey »

Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
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Re: Vanguard Prime Money Market Fund

Post by lostdog »

dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
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Re: Vanguard Prime Money Market Fund

Post by 1789 »

lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
BSV? Might be a good idea
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Re: Vanguard Prime Money Market Fund

Post by palanzo »

garlandwhizzer wrote: Tue Jul 07, 2020 12:55 pm Yields on all short duration quality fixed income have been devastated by the FED 0 - 0.25% rate policy. FED policy sets short rates, has somewhat less influence on long rates. With such incredibly low rates, essentially zero, in very short term instruments, the difference in yields isn't going to put a lot of money in anyone's pocket by choosing one option versus another. If you want a modest improvement in yield you either have to accept longer duration which has its own risk (inflation/rising rates) and/or default risk (corporates). Nothing in quality fixed income at present is expected to outperform inflation going forward and many may underperform inflation producing negative real yields which is what TIPS offer now. The FED is pushing investors away from fixed income and toward risk assets attempting to prevent worse things from happening by choosing the lesser of two evils as they see it.

Garland Whizzer
What worse things are they trying to prevent?
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Re: Vanguard Prime Money Market Fund

Post by e5116 »

cobra911 wrote: Tue Jul 07, 2020 12:10 pm Several have stated: "+1 to online savings (with account sign-up bonus) and CDs"

So ... What is the best current Online Savings and/or Checking bonus offers out there now??

Thanks
Wells Fargo checking for $400 bonus with at least $4000 in direct deposit, Citi checking and savings for $400 bonus with $15k+ new to Citi funds, and Capital One savings for $300 bonus with $30k+ new monies (well tiered from $100-$500 for every $10k) and a high interest amount, currently down to 1.0% (that offer is no longer). I plan to move funds to Capital One later for the higher rate or evaluate and potentially use Vanguard short-term bond...
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

1789 wrote: Tue Jul 07, 2020 7:08 pm
lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
BSV? Might be a good idea
What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
lostdog
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Re: Vanguard Prime Money Market Fund

Post by lostdog »

anon_investor wrote: Tue Jul 07, 2020 7:30 pm
1789 wrote: Tue Jul 07, 2020 7:08 pm
lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
BSV? Might be a good idea
What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
+1

Nice find.
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1789
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Re: Vanguard Prime Money Market Fund

Post by 1789 »

anon_investor wrote: Tue Jul 07, 2020 7:30 pm
1789 wrote: Tue Jul 07, 2020 7:08 pm
lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
BSV? Might be a good idea
What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
Looks great to me :beer
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Re: Vanguard Prime Money Market Fund

Post by rkhusky »

anon_investor wrote: Tue Jul 07, 2020 7:30 pm What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
Okay if you have a time frame for the money of 2+ years.
palanzo
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Re: Vanguard Prime Money Market Fund

Post by palanzo »

1789 wrote: Tue Jul 07, 2020 7:46 pm
anon_investor wrote: Tue Jul 07, 2020 7:30 pm
1789 wrote: Tue Jul 07, 2020 7:08 pm
lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm

+1
Investment grade version or the index version?
BSV? Might be a good idea
What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
Looks great to me :beer
It's 63% Government Mortgage-Backed!
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Re: Vanguard Prime Money Market Fund

Post by anon_investor »

palanzo wrote: Tue Jul 07, 2020 9:16 pm
1789 wrote: Tue Jul 07, 2020 7:46 pm
anon_investor wrote: Tue Jul 07, 2020 7:30 pm
1789 wrote: Tue Jul 07, 2020 7:08 pm
lostdog wrote: Tue Jul 07, 2020 6:16 pm

Investment grade version or the index version?
BSV? Might be a good idea
What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
Looks great to me :beer
It's 63% Government Mortgage-Backed!
But shouldn't that be less of an issue with such a short duration (2 years)?
Dontridetheindexdown
Posts: 160
Joined: Sat Feb 14, 2015 10:08 pm

Re: Vanguard Prime Money Market Fund

Post by Dontridetheindexdown »

We still use Vanguard Treasury Money Market (use any available equivalent) for taxable stable assets (and TSP G Fund for tax-deferred stable assets).

Regardless of inflation, deflation, stagflation, or noflation, a dollar is still a dollar.

In the past, we used FDIC-insured accounts for taxable stable assets, and found it was just not worth the candle (as our British friends would say).

At 50/50 equities/stable assets, on any trading day, our net worth varies by many times more than we could earn annually from FDIC-insured accounts.

We sleep well at night with half our investments in stable assets that may not appreciate, but will not depreciate (nominal value, of course).

As always, your mileage may vary.

I post this only to offer an essential thought - there is no downside to using a Money Market (or equivalent) as ballast.
Big Dog
Posts: 2010
Joined: Mon Sep 07, 2015 4:12 pm

Re: Vanguard Prime Money Market Fund

Post by Big Dog »

lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
ST Bond Index Fund Admiral, VBIRX
Dontridetheindexdown
Posts: 160
Joined: Sat Feb 14, 2015 10:08 pm

Re: Vanguard Prime Money Market Fund

Post by Dontridetheindexdown »

VBIRX is also an excellent vehicle.

I advocated for, and was successful, in placing my in-laws home equity proceeds in VBIRX.

Might be the best choice ever!
Northern Flicker
Posts: 6504
Joined: Fri Apr 10, 2015 12:29 am

Re: Vanguard Prime Money Market Fund

Post by Northern Flicker »

abuss368 wrote: Tue Jul 07, 2020 12:32 pm The focus of my questions is aimed more at the RISK of Prime Money Market fund more so than the lower interest rate!

Not yield shopping but rather is Federal Money Market (or another money market) less risk than Prime Money Market.
Vanguard Federal MM is lower risk than Vanguard Prime MM.

A Federally insured MM account at a bank or credit union is lower risk than Federal MM.
Risk is not a guarantor of return.
TheDDC
Posts: 1125
Joined: Mon Jan 08, 2018 11:11 am

Re: Vanguard Prime Money Market Fund

Post by TheDDC »

Dontridetheindexdown wrote: Tue Jul 07, 2020 10:16 pm VBIRX is also an excellent vehicle.

I advocated for, and was successful, in placing my in-laws home equity proceeds in VBIRX.

Might be the best choice ever!
I’m showing an SEC yield of .48% on VBIRX. Ally still wins.

-TheDDC
Rules to wealth building: 90-100% VTSAX piled high and deep, 0-10% VIGAX tilt, 0% given away to banks, minimize amount given to medical-industrial complex
Northern Flicker
Posts: 6504
Joined: Fri Apr 10, 2015 12:29 am

Re: Vanguard Prime Money Market Fund

Post by Northern Flicker »

Dontridetheindexdown wrote: Tue Jul 07, 2020 10:16 pm VBIRX is also an excellent vehicle.

I advocated for, and was successful, in placing my in-laws home equity proceeds in VBIRX.

Might be the best choice ever!
I prefer VSGDX the federal short-term bond fund to VBIRX.
Risk is not a guarantor of return.
User avatar
Munir
Posts: 2743
Joined: Mon Feb 26, 2007 4:39 pm
Location: Oregon

Re: Vanguard Prime Money Market Fund

Post by Munir »

anon_investor wrote: Tue Jul 07, 2020 7:30 pm
1789 wrote: Tue Jul 07, 2020 7:08 pm
lostdog wrote: Tue Jul 07, 2020 6:16 pm
dewey wrote: Tue Jul 07, 2020 4:54 pm
Big Dog wrote: Tue Jul 07, 2020 12:58 pm I went into Vanguards short-term bond fund last fall, and its worked great. Keep the emergency fund there.
+1
Investment grade version or the index version?
BSV? Might be a good idea
What about Vanguard Short Term Federal Fund (VSGBX)?

https://investor.vanguard.com/mutual-fu ... file/VSGBX
I am considering moving most of the funds in Vanguard US Treasury Money Market(VUSXX) to VSGBX which has a higher yield of 1.3% and duration of 2.2 years. I considered and liked VBIRX (Short Term Bond Index Fund) but as mentioned above, it's yield is only 0.49%.
Last edited by Munir on Wed Jul 08, 2020 1:00 pm, edited 1 time in total.
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