Saturday, May 31, 2008

* Money Market Rates - How Low Can You Go?

Back in March I wrote "MMA Rates are Falling, What are You Going to Do?" Then my best money market earner was AmTrust Direct at what I described as a "measly 3.75%". In less than three months, AmTrust Direct is now at 2.75% and is no longer my best earner. That honor now goes to ING at 3.00%. This somewhat surprised me since ING has traditionally been my lowest account.

When I last discussed money market rates, I begun to accelerated the pace of moving funds from my money market account (MMA) to my stock investments. Since my annual bonus came in late March, I am now actually sitting on more cash than before. It is a delicate balance between finding good investments vs. effectively giving the bank an interest-free loan. My wife is doing her part - she found a mini-van to help lower the MMA balance.

On the positive side, each month as interest rates fall, my dividend income increases. Not only from additional investments, but from companies raising their dividend rate. It is comforting to know that even in these financially difficult times, there are still good companies out there succeeding in there business and rewarding their shareholders. I just need to get more money out of the MMAs and into these good companies - at the right price, of coarse.

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