Gyroscopic Investing

Is there a reason why the book doesn't recommend the Capital Preservation Fund for cash? It was one of Harry Browne's recommendations.

forty-niner wrote: Is there a reason why the book doesn't recommend the Capital Preservation Fund for cash? It was one of Harry Browne's recommendations.

Are you talking about the Capital Preservation Fund from American Century (CPFXX)? 

I use it.  I think we've discussed it a little bit on this forum before.  The fund itself is fine, but some people don't like it b/c it has an expense ratio of .5%, which is pretty high.

I like it b/c it's very convenient and has a low minimum. 

Just took a quick glance and it looks like an ultra-short term T-Bill fund. But I concur with AdamA. It does seem a little pricy compared to SHV or BIL. Maybe I'm missing something here, but I don't see an added level of security that justifies the fairly steep E/R.

Ad Orientem wrote: Maybe I'm missing something here, but I don't see an added level of security that justifies the fairly steep E/R.

I like it because you can write checks from the account.

AdamA wrote:

Ad Orientem wrote: Maybe I'm missing something here, but I don't see an added level of security that justifies the fairly steep E/R.

I like it because you can write checks from the account.

That makes sense.

Thanks to everybody for replying. Yes, I was asking about the American Century Fund. I hadn't considered the expense ratio.
What I like is the fact that it maintains a value of a dollar per share. BIL fluctuates slightly, which makes it more complicated when you're filling out your tax return.

The Capital Preservation Fund was one of the original money market funds in the late 1970s.  It invested solely in US Treasury Bills and was founded by James Benham (I think he had formerly worked for the Federal Reserve system).  Under Benham, it was known for its customer service, efficiency and conservative approach to investing in the money market.  It was bought out by American Century Investors (then known as Twentieth Century Investors) sometime during the 1980s. I had an account with them for many years.

As far as I know they are still around, but like most Treasury-only money market funds they stopped accepting new investors when interest rates fell so low several years ago that it was no longer attractive to solicit new business.     

HB Reader wrote: As far as I know they are still around, but like most Treasury-only money market funds they stopped accepting new investors when interest rates fell so low several years ago that it was no longer attractive to solicit new business.     

I don't think that's true. 

I started using them about 3 years ago, and, as far as I know, you can still get a CPFXX account with a $2500 minimum.

AdamA wrote:

HB Reader wrote: As far as I know they are still around, but like most Treasury-only money market funds they stopped accepting new investors when interest rates fell so low several years ago that it was no longer attractive to solicit new business.     

I don't think that's true. 

I started using them about 3 years ago, and, as far as I know, you can still get a CPFXX account with a $2500 minimum.

You may be right.  I haven't looked real closely at the fund in the last few years.  True Treasury-only money market funds can't be very profitable to run these days.

HB Reader wrote: True Treasury-only money market funds can't be very profitable to run these days.

Yeah, they must not be. 

They sent me a survey a while back asking what I would do if they changed the fund in such a way as to allow some non-treasury assets. 

I picked the "sell" option.