Anybody want to help me start an Investment Fund?
Why doesn't someone start a fund that only invests in one thing - the highest returning risk free investment? This would be CDs, savings accounts, and anything else that is FDIC insured and cannot lose value. What I don't understand is why anyone would want to invest in such a risk-free investment if it doesn't pay a rate at least close to the highest rate available.
For example, right now the best yielding 1 year CDs are paying close to 5.2% APR. Why is anybody putting money into CDs at the bottom of that list that are only yielding 4.2%? Or even worse, what possible reason would someone have to go to these jokers who are only paying 1.5-3.7%??? Do people not know that better rates exist?
It seems like a fund that invested only in the highest returning risk-free investments available at the time would do two important things. First, it would free up savers like me from having to constantly shop around for the best CD rate whenever a CD is about to mature. Second, as more funds flowed into this fund, it would eventually get large enough that it would start to "arbitrage" away some of the difference as funds were more efficiently allocated to banks. This would benefit those who did not even know about the fund.
For example, right now the best yielding 1 year CDs are paying close to 5.2% APR. Why is anybody putting money into CDs at the bottom of that list that are only yielding 4.2%? Or even worse, what possible reason would someone have to go to these jokers who are only paying 1.5-3.7%??? Do people not know that better rates exist?
It seems like a fund that invested only in the highest returning risk-free investments available at the time would do two important things. First, it would free up savers like me from having to constantly shop around for the best CD rate whenever a CD is about to mature. Second, as more funds flowed into this fund, it would eventually get large enough that it would start to "arbitrage" away some of the difference as funds were more efficiently allocated to banks. This would benefit those who did not even know about the fund.