8 ms·

This is extremely misleading and no one should be using bond funds as a checking/savings account replacement. You have mark to market and liquidity risk here w

by whatok 8y ago

This is extremely misleading and no one should be using bond funds as a checking/savings account replacement. You have mark to market and liquidity risk here which in normal circumstances you do not have with a savings/checking account. Additionally, Robinhood is reportedly investing proceeds in US Treasuries. US Treasuries have a completely different risk profile than corporate investment grade bonds.

all_blue_chucks 8y ago
> no one should be using bond funds as a checking/savings account replacement Literally all money market accounts are bond funds under the hood, actually.
- whatok 8y ago
  Under the hood vs how they function in everyday situations are completely different things. If I sock away $100 a month for the next 12 months to pay for something, which one is more likely to have >=$1200?
  - bronson 8y ago
    That depends on what you mean by "sock away".
    - whatok 8y ago
      Thought was implied but money market funds vs corporate bond funds.
- ac29 8y ago
  With the important difference that money market accounts should never lose principle (aka "breaking the buck"). It has happened, but its fairly uncommon. Bond funds, however, frequently can and do lose value - if interest goes up, price goes down (the reverse should also be true, though).