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Agree - cash even at zero is useful. May allow additional risk-taking with other $$ you woudn't otherwise engage in. In addition, have yet to find a fund company that doesn't relax its rules somewhat on "frequent trading" within its money market funds. Can be helpful when markets are in state of high flux - though still need to watch out on the other end (which equity funds you buy or sell).
Truly "safe" is some kind of cash account - savings, CDs, money market. Yeah, you can lose value to inflation, taxes. But for most folks, "safe" means not losing value, period. When they open up their statements, they do not see lower values from month to month. You can argue till you are blue that with taxes figured in, these are losing value. But the end game is the values are steady, or going up a teeny bit.
Many of us advisors would say these are NOT safe in the technical sense. And we would probably use a very short-duration fixed-income fund. But these do fluctuate day-to-day, and some folks can't handle even that.
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You can argue till you are blue that with taxes figured in, these are losing value. But the end game is the values are steady, or going up a teeny bit.
Many of us advisors would say these are NOT safe in the technical sense. And we would probably use a very short-duration fixed-income fund. But these do fluctuate day-to-day, and some folks can't handle even that.