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Greetings, all, where have you been putting your Roth cash and cash equivalents (money market funds)? I decided to look up my Hewitt Money Market fund rate and was dismayed to see it was 0.625%. There is no doubt I can do better than that! Especially because I am in a reasonably large cash position for now because I don't trust which way to move in this market (I am at least trying to learn about TIPS but not sure about them right now either).

ING Direct will let me open a Roth savings account at 2.50% APY right now with no fees. Where else could I do better? Anywhere?

I have a $25,000 chunk of Roth cash at 7% till March 2010 because my credit union was having a CD special but the max I could deposit was $25K. No way to go there any further.

I'd appreciate all input. 2009 is the year when I hope to get smarter about the savings/investment side of my money and I sure have a long way to go.

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This is the difficulty with being in a lot of cash- what do you do with it?

I am in the same position having moved most of my money out of the market in the middle of the crash. Right now the DJIA is still beneath where I pulled out. But it is steadily rising to where I pulled out and then I will be "behind" if I am not in the market. Hmmm what to do?

I decided to "dollar cost average" back in and moved about 25% into the market a month or so ago. I am not sure when I will move the rest in because I believe both stories (going up, or going down) but will dollar cost average in a little new money. I'll dollar cost average in a little more but am sure I'll get burned.

However, accepting that I can't make the absolute best decision, it is okay to accept a reasonable decision. Part of that decision is recognition I'll be investing in the future and my decisions right now for specific cash will eventually be dwarfed by future investments coming from income. (Presuming I have a job of course).

But this leaves me in the predicament- in the future when this happens again and I am not earning an income, what would be the correct course of action?

Or for that matter, what is the correct course of action at this moment?

I just read an article which suggested that splitting assets among CD's, stocks, bonds, real estate, and cash left the happiest investors according to happiness meters. I don't own any CD's and only own bonds through mutual funds. I own no real estate. So I am thinking of laddering some CD's, picking up a few bonds, and investigating buying a piece of property at record low interest rates with the idea of being able to meet mortgage payments.

My intention was with my equity investing to have uncorrelated asset classes, but the reality was that they were highly correlated except for the cash and my house which didn't get nailed as hard as a lot of housing markets.

So my recommendation is: look for truly uncorrelated asset classes and invest between them in this highly uncertain macroeconomic situation. A few TIPS would be good too.
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Hi Xray,

Happy New Year!

Vanguard's Prime Money Market fund's current yield is 2.77%. The fund is consistently in the upper end of yields, plus you have the added benefit of investing with a company known for low costs and integrity in its dealings with investors. Plus, when you are ready to move back into the market, Vanguard has the best and generally the cheapest and most reliable bond index funds.

If, however, you are leaning toward purchasing individual bonds in your Roth, you might be better off investing with Fidelity, whose brokerage side is better developed than Vanguard's. Fidelity also has decent yields on its money market accounts, though for some reason I can't find a quote right now.

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ING Direct will let me open a Roth savings account at 2.50% APY right now with no fees. Where else could I do better? Anywhere?

Most Credit Unions have the same rates for IRAs (any kind, including Roths) as regular term certificates.

Check out

It's getting difficult to find 3% CDs with terms under one year and 4% CDs for any term at banks. The best rates continue to be at credit unions as they are not cutting rates as fast as the banks. Several federally insured credit unions continue to offer yields around 4.50% on 5-year CDs.

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