[Cody]

You might not be fully invested in the stock/bond markets:
If you own mutual funds within your investment accounts with tickers ending in XX, those are money market funds – a cash equivalent.

For example,
Vanguard: VMFXX
Fidelity: SPAXX
Schwab: SWVXX
This post is education, not advice.

[Christopher]

This is true even if you hold 100% vtsax.
The fund holds something like $6,000,000,000 in short term reserve to handle daily buys and sells.

The overall fund holds $1.7 trillion, meaning the short term reserve is about 0.35%.

Roughly 35¢ of every $100 you put into vtsax is held in cash.

But your point still stands – don’t leave money parked in cash that you intend to have invested.

Even in high rate periods like the present, cash tends to drag overall returns down. More so when rates are lower.

[David]

That moment you invest money at Vanguard and realize you have on accident left it in the settlement fund “VMFXX”

[Kenny]

Advice: make sure the money you think is invested is actually invested.

[Mark]

Those are settlement funds, cash management accounts, or money market funds. Or layman’s terms, a glorified savings account.

I’ve seen posts on here where ppl deposited money in their ira and left it in the settlement fund for yrs thinking it was invested

[Grant]

I haven’t actually heard of anyone thinking this way (that those funds are actually in the stock market). Interesting…

[Vincent]

This _is_ investing advice: “Read the prospectus.”
I know they’re not scintillating works of literature, but I really believe it’s worth a few minutes to familiarize ourselves with at least the first section that spells out the objective and strategies of any fund we might be depending on for the next decades of our financial success.

Then there should be no surprises, like finding out VMFXX is a money market fund….

[El]

If you wanted to put a part of your AA in short term bonds would Vmfxx fill that role?

[Jessica]

I was helping a friend review her portfolio and for one account she had 100k in cash by accident. Check on your friends!

[Author]

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