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This seems pretty terrible IMO. Hypothetically let’s say everyone was using this already. Then something like Covid or another “worldwide bad event” occurs. S
by endisneigh 5y ago
This seems pretty terrible IMO.
Hypothetically let’s say everyone was using this already. Then something like Covid or another “worldwide bad event” occurs.
So people spend their money, which in this case means they’re liquidating their investments. This further drives down the price and increases volatility - in other words the people who need the money most in the most desperate times will lose the most as they will need to spend the largest percentage of their holdings.
To add insult to injury if enough liquidated then you could be in the bank run territory since there’s no FDIC insurance you could lose everything.
- masterof0 5y agoI really like your take. Also Fidelity offers a Cash Management Account(https://www.fidelity.com/cash-management/fidelity-cash-management-account/overview https://www.fidelity.com/cash-management/fidelity-cash-manag...) that is insured up to 1.25 M. That's a lot of money(at least for me). I think for people that are not rich, and need a certain amount of money saved in their account for rent, utilities, etc... a market downturn will put them in a pretty horrible situation. Imagine you get paid 3000 at the end of the month by your employer, and the next day you have only 2100 left, how do you make up for the difference?