NLIC.org

Kenneth Said:

Which fund do you recommend? (goal is capital preservation, return OF not ON my money)?

We Answered:

You really do not want anything that has the word mortgage associated with it. Although PTRAX has an outstanding record, I think in the current environment I would forgo it in favor of VBTIX.

Debbie Said:

Money Market Account - Vanguard?

We Answered:

I have had a Vanguard Prime Money Market Account for years now, and I love it. I did a lot of research before choosing that place for my emergency funds, and I have never regretted it. PS-actually as of last month they're paying 5.22%.

It's true that money market funds are not FDIC insured because they are not cash--technically you're investing in treasury notes and overnight paper. Basically you are investing in ultra short term (overnight) bonds backed by the US government. Which is as safe as it gets. They simply put that as a disclaimer so people don't confuse their investment with cash at a bank.

But the only way you'll lose money in a money market is if the government defaults on its debt--ie refuses to pay back all the government bonds and notes outstanding. This will never happen. If it does, then we'll be in a total economic global meltdown, and you can be sure you'll have more problems than losing that $15,000 (plus money could become worthless like when Russia defaulted on their debt and people burned currency to stay warm and a loaf of bread cost barrels full of money).

In short, don't worry about your money market. It is pretty much the safest place you can put your money. I wouldn't trust the FDIC to pay you back in a global economic meltdown anyway.