Comments on: Auction Rate Securities - Not a Better Money Market

By: Ken Clark, CFP

Ken Clark, CFP — Fri, 04 Apr 2008 16:02:48 +0000

I honestly think that half of the brokers pushing these didn’t understand the true risk (or at least did not give it an objective analysis).

To make things worse, many firms do not pay their brokers anything for client assets sitting in money markets… So there is an incentive, even if it is 15-25bp, to push them towards the APS.

Ken Clark, CFP
CollegeSavings.About.com

By: KMC

KMC — Thu, 03 Apr 2008 11:17:17 +0000

@ Lily - I actually tend to think that some of the investors did, in fact, understand what ARSs were. But, as you point out, the auction had never failed so they believed they were getting a great deal.

By: Lily

Lily — Wed, 02 Apr 2008 19:54:33 +0000

Who’s missing from the litigation list? Goldman Sachs, which clearly spells out the risk to auction rate securities in its disclosure to investors.

To be fair, until the last couple of months, auctions have never failed.

And also to be fair in distributing blame, investors need to be skeptical of their brokers and never invest in instruments they don’t understand. Did any of the investors who got burned understand what ARS are before they got burned? Not likely.

By: Welcome to growingthedream.com

Welcome to growingthedream.com — Wed, 31 Dec 1969 17:00:00 +0000

bigcajunmanwrote an interesting post today on Here’s a quick excerpt How would you like to invest in a product that returns high single digit returns that’s as safe as cash or a money market? They’re called auction rate securities and they’ve been

By: How much money do I need

How much money do I need — Wed, 31 Dec 1969 17:00:00 +0000

Michael David Smithwrote an interesting post today on Here’s a quick excerpt How would you like to invest in a product that returns high single digit returns that’s as safe as cash or a money market? They’re called auction rate securities and they’ve been