SPAXX is about as stable as any investment can be. It will not be risky.I still wonder when it comes to Emergency fund and its core position as SPAXX.
Is it possible to run into situation that person saved 20K but due to core position lost money and ends up with much less savings?
The rate is 4.97% vs 2.72% FDIC insured core yet performance data shows 1.92% returns for past 5 years for SPAXX.
Is keeping money in SPAXX is like investing and that money will go up and down depending how that fund is performing?
Also, would not having FDIC insurance be dangerous and there is possibility of loosing that emergency money?
Fidelity describes it as below:
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SPAXX is a money market mutual fund that aims to provide high monthly interest while preserving capital and liquidity. The fund normally invests at least 99.5% of the fund's total assets in cash, U.S. Government securities and/or repurchase agreements that are collateralized fully (i.e., collateralized by cash or government securities).
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund’s sponsor, is not required to reimburse money market funds for losses, and you should not expect that the sponsor will provide financial support to the fund at any time, including during periods of market stress.
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Statistics: Posted by muffins14 — Wed Oct 02, 2024 9:28 pm — Replies 109 — Views 13813