Tuesday, January 22, 2008
Is your money safe?
A timely and scary article in the February edition of Technical Analysis of S&C (www.traders.com) by Jon Sarkett discusses some issues that many traders may not be fully aware of. For those sitting on substantial cash pools, you'll be dismayed to learn that FDIC and SIPC only cover you for $ 100,000 or $ 500,000. . .depends on your broker and a number of other variables. Best advice. . .(a) read the article, (b) call your broker and find out exactly what kind of protection you have and (c) diversify your cash holding into a number of accounts to achieve maximum protection. When I called my broker (Schwab) and learned that only a portion of my funds were insured, the support guy commented that Schwab was so big that if they went under I would probably have serious things to worry about. . .which wasn't really reassuring at any level.