[Money market funds are meant to be safe and liquid, but many have been damaged by the rocky credit markets. What's an investor to do?
"People moving from prime to government money market funds or Treasuries are shooting themselves in the foot," he says. "Look at the yield you're going to lose. It's like burning your house down to get rid of a mold infestation.
"It comes back to why you have your money in a money market fund," says Hopwood. "You want liquidity and you want to get your money back. To take on more risk to get an extra 20 basis points of yield is insanity. If you're talking a money fund yield above 4 percent, that's a bit of a yellow flag out there now."
Top 5 weathering the storm:
MONEY MARKET FUND...................... 7-DAY YIELD %
Vanguard Prime Money Market Reserves (VMMXX) 3.84
Thrivent Money Market Fund (AMMXX) 3.74
Fidelity Cash Reserves (FDRXX) 3.64
Schwab Value Advantage Money Fund (SWVXX) 3.52
Fidelity Money Market Fund (SPRXX) 3.52] BankRate
