Newbie question

[J_V]

Let's say someone had the following goals:

a) Invest his money with some rate of return
b) Be almost totally liquid
c) Have close to O risk

Would T-bills be an idea...money market? Thanks...i am a total newbie.

[GeorgeF]

A mutual fund invested in TIPS (treasury inflation protected securities) from www.vanguard.com (http://www.vanguard.com), VIPSX I think, would be best.

Although the short term of T-bills protects a bit from inflation they are not liquid unless you own them in a mutual fund (check writing, bill pay ect).

I suggest that you open a vanguard account and put your money into TIPS (inflation protected) and the prime rate money market account (T-bill equivalent). Also consider the GNMA fund which invests in mortgages and has more yeild and risk.

If we are talking serious money you might want to consider some exposure to other asset classes for example international bond funds.

[Wildbill]

Time frame is quite important here. Liquidity is a tough measure when tied in with 100% access. Way many older folks do it is to ladder CDs, that way you are getting money on a pretty regular interval, but its not quite the liquidity you would want. TIPS funds might not be bad, but they are going to underperform at times and outperform at others so tradable paper is probably equal in terms of risk and probably a lower price depending on how much money you have to invest. In all there are quite a few ways to go about it, but the more control you give up and the more risk you take on, the better your return, basically what the theory of investing would imply.

[adios]

Good advice but I'd check out the fees as I'm not sure how they impact the return.

[adios]

Excellent advice IMO. Since you and GeorgeF mentioned TIPS what kind of risk profile do they have?

[J_V]

Okay....we're talking 200K and I can only invest for two - three months for sure...the money will be going other places after that.

[Aragorn]

Bascially, you are talking about a money market fund which pays almost no interest. There is no such thing as a high return, liquid, no risk investment.

[J_V]

Who said anything about high return? Obviously with very little risk, my return will be minimal.