Bailout

Treasury will guarantee investors' principal to stabilize mutual funds

money markets

Some of his clients are invested in the Reserve Primary Fund, including one who invested $2 million. Investors are expected to lose 3 cents for every dollar invested. "The client that had the most said to me, 'If we lose 3 percent, it's much better than being in the stock market,' " Tobias said.

Saxon Birdsong, chief investment officer with Baltimore-Washington Financial Advisors in Columbia, said his office has gotten more calls lately about money market funds than anything else in his 20 years in the industry. That's because, about nine months ago, the firm took a bigger position in money market funds than usual, with up to 15 percent of the portfolio in those funds. Clients wondered if they should be diversified among more funds or asked about an alternative to money market funds, Birdsong said.

Birdsong said he recognizes the need for the government to restore investors' confidence, but had mixed feelings about the insurance program.

"There were a lot of participants in risky money market funds that got the advantage of higher returns and those that paid closer attention to what they were investing in effectively end up being penalized," he said.

Ross Hatch, a 74-year-old retiree in Fairfax, Va., was one of those investors who called Birdsong's firm yesterday.

He was glad to hear of the new insurance program and the government's quick action.

"I'm a little bit concerned where the government is going to get all the money," Hatch said, adding, "I know where they are going to get it from: you and me. I'm not sure what the alternative is."