The financial meltdown of loaning insurance giant American International Group, or AIG, has international and domestic investors troubled.
Some consumers wonder just how safe their mutual funds and investments are during this turbulent economic time.
"Good Morning America" financial contributor Mellody Hobson explains what the market's changes mean to you and lets you know how safe your money is.
Pick up the phone and call your fund company's call center and ask if your fund is currently investing in any of the companies that are in the headlines — like Lehman Brothers and AIG.
Also, ask the representative about the fund's quality controls: How do they make sure your money market investment is stable? This is information the call center representative should easily be able to tell you.
Look at they yield of your money market fund. A good rule of thumb is to stay away from money market funds with a current yield or expected return greater than 2 percent. This number varies, but in today's environment, 2 percent is a safe number to use as a guidepost.
You should be investing in a money market fund for quality, not for an aggressive return. I would be leery if your fund is advertising its high yield. Think of yield as risk — the higher yield the greater the risk. If you go out on the margins, you are walking closer to the cliff. If it sounds too good to be true, it probably is. My bias is to stay away from the cliff.
I spoke with some very senior people in the mutual fund industry over the last couple of days, and I do not think there is any cause for concern. Only a small number of funds owned Lehman Brothers and those that do are being covered by their parent companies to ensure the safety of the investment.
The fundamentals of money market funds remain very sound. It is important to keep in mind that the fund industry is one of the most strictly regulated in the country. The benefits of investing in a money market fund far outweigh any of risks.
There are more than 800 money market funds. Under no circumstances should you liquidate your account and simply "invest" the money under your mattress.
Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com. Ariel associates Aimee Daley and Matthew Yale contributed to this report.