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So why do investors and advisers act as if it’s business as usual? If anything, they complain that the funds are too boring, not too risky. To be fair, the funds remain one of the few stable assets in a volatile investment world. They've weathered the U.S. budget showdown, the downgrade of American debt and the historic stock market swoon of 2009 market. The buck is still the buck for money-market investors. None has failed to do so since 2008. (Even Reserve repaid 99 cents!)
But are there dangers lurking beneath the surface? Absolutely, SEC's Schapiro said last week that there have been 300 cases when funds needed help, even if Reserve was one of only two that actually broke the buck in the last 40 years.
Are regulators just crying wolf?
“The truth is that money markets are extremely safe for individual investors,” said Mark S. Germain, money manager and founder of Beacon Wealth Management . “If there were signs of trouble in the markets, people’s funds holdings are very short-term and there would be plenty of time to act.”
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