Move funds out of 5% Money Market?
My husband owns his own company with another partner and several share holders. His ownership position is 41% of the company, so we have good income currently from the company through his salary and profit sharing checks. However, we also realize that the company is a huge part of our retirement funds and if it should run into hard times in the future due to a recession etc. we don't want to be too risky with our other investments.
My husband has a 401K type fund which he invests in to maximum limit. We have about $400,000 in a money market bank fund that is earning 5.12% interest. He is hesitant to move the money into a stock fund due to the current volatility of the stock market. I think it just makes him feel comfortable to have the money "in the bank" in case his company should fail, or we go into a recession etc.
I've been investigating funds and their associated returns and costs. It seems to me we could probably invest in a conservative fund and still be ahead 2-3% after paying the fund costs each year over the 5% we get with the MM, so I'm inclined to move the money into a stock fund.
We just can't seem to decide on a fund and pull the trigger to move the money. He seems to be happy with the 5% return offset by the lack of risk...Are we being too conservative? We don't need the money in the forseeable future.
Any recommendations on a fund or should we stay put in the MM?