What Happens to Our Investments if Schwab, Fidelity or Vanguard Collapse?

[@brianmurphy-j4h]

I'm 53. Been saving in my 403 B Fidelity for 7 years now as a doctor, my goal is to retire in 5 years with a 7 figure net worth. I already own a house, but keen on buying a second one. I know it's a lofty goal, but I'm now looking towards the stock market to fuel it up.

[@MariaPerez-pp1dp]

If you're sitting on that much cash position, I'd start looking at dollar cost averaging into dividend stocks that have a good track record like $MAIN $ACRE etc. I would suggest you avoid trying to actively trade. Look for things you can buy and hold long term that will pay a dividend. Not a financial advisor, but this is my two cents of advice

[@ChristianJacquet-my3rl]

Not an advisor too and not against the use of one but personally, with more investing tools than ever before, financial advisors should get back to cold calling and free market opportunities to remain relevant, I don't see anyone paying to seek their services anymore

[@KevinCollins-kg5hl]

Interfering, financial advisors significantly face more stress dealing with assets than any other profession, you may disagree at first but that's okay. Personally, I'm totally comfortable paying someone for a job well done, and I've covered a lot more financial milestone in lesser time than I would if i was still investing as a newbie.

[@ric-morris7763]

I have never had an advisor before but recently inherited a fairly substantial amount of money, and am unsure how to proceed other than keeping it in a CD... mind if I look up this person guiding you please?

[@KevinCollins-kg5hl]

Glen Howard Chester is the licensed advisor I use. Just google the name and you'd find basic info. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.

[@BuceGar]

As someone with a brokerage account at Charles Schwab, this was excellent information, thanks for making this video.

[@CynthiaArmstrong7]

Sir, your channel is a Godsend. I have been so worried about my money in my checking account at Schwab. I had no idea it was insured. This is a great relief. I am happy to subscribe. Thank you.

[@lincolnbutler8051]

Thank you very much for preparing this video. I was one of the people who asked you to do this. Kind regards Lincoln

[@belangp]

Good video. All ETF's and mutual funds (including money market mutual funds) are governed by the Investment Company Act of 1940. It requires each fund to be a separate corporate entity with its own management and also requires all assets to be held in a trust with an independent custodian. It's a beautiful thing.

[@gorkushka]

what about CITs? My understanding is that a Collective Investment Trust is owned by a Bank but are For the Benefit Of the shareholders.

[@Thirrtyeighterr]

Beautiful thing, yes!

[@MonteRosa849]

Thank you very much Mr. Berger for unpacking a very complex matter and explaining it in simple, understandable terms. 🎯

[@michaelevans5328]

Super helpful. Thanks for cutting through the noise and making a complicated subject understandable. Although I think my money is relatively safe at a bank or brokerage, I do worry about temporarily losing access to my money due to solvency issues, hacking, cyber attacks, fraud, or a simple misunderstanding. So perhaps maintaining cash accounts at multiple financial institutions would be a good idea.

[@joseCalderon1976]

You also have to have a few thousand dollars in cash somewhere accessible just in case the banks run out of cash all of a sudden

[@bobbyd6680]

​@@joseCalderon1976 Except it is becoming a cashless society.

[@SF-fb6lv]

Thanks for the video! When I asked these questions of the firm that our 401k accounts are in, the woman I spoke with said "You are the first person I've had ask these questions." The first two representative I spoke with hadn't heard of SIPC or thought it was SPIC; I don't know why they were even working there. Scary.

[@George-u1v]

How can I make good profit as a beginner starting with $6,000 ~ir5

[@Dominic-y6e]

As a beginner, it's essential for you to have a guardian to keep you accountable. I'm guided by Amanda Katherine Nakitare

[@Elijah-d2l]

I racked up so much losses trying it on my own. Amanda really saved me from myself

[@Eleanor-d8h]

Finding someone truly skillful is hard. I'm happy to see that a lot of people found Amanda

[@FelixThompson-h4d]

Same here. Amanda managing myportfolio was my best decision. Gotten more than half a million since

[@Fiona-v9p]

Amanda is a life changer. Through her I went from almost homeless to being a home owner

[@117775EM]

Excellent overview Rob. This is precisely the type of information needed several weeks ago so that depositors would not have behaved out of fear and moved deposits from SVB. Any banking system, especially our with rules, regulation and oversight (some may say were asleep) requires confidence in order to remain a solid institution.

[@joythought]

The majority of deposits in SVB were not protected by FDIC insurance and the valley is a tiny community connected on Twitter so this kind of inevitable if there was anything that spooked them they all had the responsibility to grab their money and run for the hills.

[@disch972]

Thanks Rob! You're more informative than all the talking heads I listened to this week!

[@brekkenhughes8703]

It's always a pleasure to have you here as a mentor, i learn a lot from your videos, and it has helped me in decision making, particularly in the financial sector.

[@corneliuswowbagger]

Happened on this by accident, but it is information I was seeking and things are pretty much as I thought. Thanks for the reinforcement. I am definitely subscribed from here on out! Thank-you!

[@maxplank4083]

Excellent video. You are the fist person to explore this subject. These questions are becoming increasingly more important in an increasingly risky financial world. The majority of us do not really know how safe our money is.

[@mattlv2002]

Thank you for this great explanation. Here is my question. If Schwab is keeping my money market deposits in SWVXX separate and not loaning that money out or investing it, how are they paying me a 4.47% yield?

[@csg6262]

Great video and explanation. My employees were just asking me about this today. You did a much better job explaining it than I did. It's almost like my phone was listening. Hmmm...

[@schnoonsdad]

A very helpful & lucid explanation. I would add two thoughts. When considering the potential for worst case situations, on the order of "what if Schwab or Fidelity goes under?", I would suggest that if things got that bad we all have bigger, more dire problems to face than what is our money is worth (like literal blood in the streets). Possible, but highly improbable. I also would mention a sort of market risk that comes with some investment vehicles and that played out during the 2008 debacle. That would be that there is a delay, sometimes significant, before you can get your money back. The old maxim about not putting all the eggs in one basket becomes especially apropos if you are likely to funds for expenses, or are disposed to taking advantage of marked down asset prices such as we saw in 2009.

[@kaseylv922]

This is something I always worried about with our brokerage firm, knowing they weren't FDIC insured. You gave me great peace of mind - thank-you!

[@jameswood9772]

Rather of relying on penny stocks, I wish to diversify my assets by investing in ETFs/index funds/mutual funds and stocks of corporations with stable cash flows. I received $400k from the selling of my property. What should I do?

[@speedysplit]

Thank you so much for educating us Mr. Berger. We changed our brokerage from Schwab to Fidelity in lite of all the recent news about Schwab. Our fears were unfounded. Well, we will just take advantage of fractional shares and automatic investing on ETFs offered by Fidelity and not by Schwab.

[@briandarnell1809]

Thanks for the timely information. My wife was just asking about all the money we have with Fidelity and you saved me a ton of research time.

[@msisles6278]

Your investments are protected under rule 15c3-3. The clearing broker is required to do a reserve calculation and set aside funds in segregated account. In addition, under the rule a daily possession or control calculation is done daily to ensure fully paid and excess margin securities are under the control of the broker. Any segregation violation and the broker must act to reduce the violation.

[@EricMcDowellegm]

Thanks so much for this video! I have funds in Schwab and Fidelity so your words were reassuring. New subscriber! Glad I found you. 😊

[@smb-zf9bd]

I used to ask such questions, "What if the Dow went to zero?" "What if the banks failed?" "What if the dollar collapsed?" I now know if any of these happen there is not a thing to do. Cash won't matter and neither will bullion since food and safety will be the primary concern. All those panting to return to "Little House on the Prairie" will get their chance to "get close to the land". The one response we will never hear is, "Vanguard collapsed? Oh well, too bad." I guess one option is spreading the risk - securities, property, art, bullion, etc but if we're being honest, if our financial system collapsed few would be debating on the price over the modern abstract in the great room.

[@ckersh74]

Bingo. If Fidelity/Vanguard and the like go under, the whole house is very likely going down.

[@mrbigglesworth375]

I recently was told it would be a good idea to remove my margin account status within my brokerage account. I did so as I don't use it anyhow. But the reason as I understand is the margin status somehow allows the brokerage to lend my share out to others, which could complicate things depending on who was borrowing those shares. Maybe I am over reacting but I did notice that my account now shows "your shares" statement on each position. Just food for thought. I use Vanguard BTW.. love them.

[@ericmcdonald7313]

Well said. I am a 30+ year RIA of my own firm and have been answering this question over the past week. Appreciate your description.

[@cedomirdzunic5194]

How unbelievable it is to me that this is a free content. Fantastic work sir! Thank you so much for putting all this together!

[@Aspectus]

My biggest concern is that I make the right call on a trade, but then they reverse the trade or don't pay out. Ask those who owned Puts on Signature Bank or Silicon Valley Bank.

[@bdietz2]

Congratulations - you are a great teacher and your explanations in this video were simple, direct, and easy to understand. Anyone can make things sound complex, but it takes work to explain something in clear, simple terms. (BTW I'm in my 70s and remember reading about the basics of investing when by grandmother was buying stocks and I was in high school. What I learned then has always been helpful. I'll subscribe to your channel.)

[@jimm2442]

Finally some good information rather than click bait doom and gloom. Thank you, I am now one of your many subscribers.

[@bencheung2407]

Excellent information! You just clear up the cloud in my head in the past week on my concerns on the assets at the brokerage accounts due to the recent banking fallout. Thank-you!!!

[@PH-md8xp]

The big brokerage houses are Too Big To Fail (TBTF), the government would have to step in with “extraordinary measures” to prop them up, acquire them, or whatever it takes to keep them afloat like they did during the Great Recession.

[@joekuhnlovesretirement]

Congratulations on reaching 100,000 subscribers. 100% high quality content.

[@rob_berger]

Much appreciated!

[@JimPoole-u4t]

Excellent explanation of the difference between brokerage firms and banks and how they work. Important for all investors to know.

[@ponzianomanning3071]

I feel more at ease with my stock and money market acc. at Fidelity. Thank you!

[@miketracy9256]

Stock funds are ownership in companies. Bond funds are risky investments when interest rates increase. Treasuries longer than 2 years are exposed to increased risks and any incompetent banks that invested in 10-year T Bonds since 2000 were unwise. The 250K limit should never be increased. It used to be 100K.

[@billrailsback5176]

Excellent- it´s all about "Segregation of Assets". Brokerage firms keep our assets apart from theirs, whereas Banks (And Life Insurance Companies as I understand) Do NOT. Cheers

[@maxlittle1063]

What if you open a Schwab brokerage account (not a Schwab bank account) and put money in it, but just let it sit there and do not invest in anything or buy any shares? How is that money protected?

[@user-jy7yw5kw3w]

I think Vanguard would be the last one standing since it’s owned by its members. Wouldn’t it then take all its members to withdraw at once for it to fail?

[@shortyofshorts1249]

You’re right, Vanguard is a very strong and reputable company. Us that invest in their ETFs support them and reap the great/ stable return ratio.

[@spencerwinston4334]

With a Marxist tyrant Brandon Biden, all investments are dicey as Marxists do not adhere to Constitutional property principles. Tyrants tyrannize that's what they do by definition. The Marxists are snakes and reptiles of the lowest order. Biden would nationalize a piggy bank in a church in a New York minute as this obvious degenerate tyrant is raiding the free market citadels like Ghenghis Khan Marx on a holiday rampage. Vanguard and others with SVB as emblematic are so "woke" at the top, the Marxists are looking to change the drapes at Vanguard HQ to Crimson Marxist red. Never, never, never, never, never, never turn your back or guard on a Marxist. Be careful please everyone, the Marxist tyrants are pervasive even in seemingly "safe harbors."

[@jarthurpaxton9223]

Excellent. Couldn't have been better done. Clear, concise, and substantiated by documentation.

[@tmangeles7575]

Thank you. I called Vanguard and asked this question and they never responded. Subscribed and upvoted.

[@douglaslitke6794]

Money I have at Schwab that is NOT invested goes into Schwab bank. (or their second bank, Schwab Premier Bank).

[@ThumperX9]

Such a good posting...I'm sure many people had the question "what would happen to my investments if say a Vanguard went under?" Thank you for explaining the separation between the investment firm and custodian.

[@freeroamer9146]

Interesting as well as reassuring! Good to know there are checks and balances in place to protect investors. 👍

[@DesertRat332]

I was in TDAmeritrade. Then Schwab bought them out. I'm still nervous. I think I need to pull out of Schwabb. My account is 10% lower than it was 3 years ago, even though the market bounced back and is now at an all time high.

[@fij7963]

Thanks for the clear explanation Rob! Along the lines & probably for another video, I would love to hear (& learn) from your take on protection on "annuities" against these institutional failures.

[@melissanative1799]

YES, I CAN'T BELIEVE NOBODY IS TALKING ABOUT THEM.

[@FoursideAssetManagement]

There is another risk element to the basic money market fund which the average brokerage account is built upon: bond credit risk. If US Treasury Bonds should ever default, it would jeopardize the integrity of millions of brokerage accounts that are constructed through short term bonds. Since we are ever closer to a debt ceiling and our bonds are slowly yielding less, this risk grows in my opinion.

[@vincepoy2]

One thing you didn't cover is with Brokerage Accounts using Schwab for example, they have something for univested cash which depending on the broker, can either be a Money Market Fund or it goes to a FDIC account. For the former, that would be covered by SIPC insurance while for the later, it is under FDIC insurance with the bank it went to but in both cases, the FDIC Bank or the SIPC Money Maket Fund would still be investing that money however they want.

[@rob_berger]

That's my understanding as well.

[@tomatden]

I had this exact question as well, and here’s another wrinkle. Say I have a regular brokerage account with Schwab, a traditional IRA, and an inherited IRA also with Schwab. Does each account get 250K of coverage (for a total of 750k of coverage)for uninvested cash, or is the combined total of uninvested cash in all 3 accounts only covered by 250K? Thanks in advance, super helpful channel!

[@SimpleAbundance]

@@tomatden I don’t have the answer but my understanding is per person per type of account, I think you’d qualify for 500k, . I’d call them, I’m really curious what the answer is. An Ira is an Ira imo but the term “inherited “ is throwing me off as I’m not familiar with trusts and the other nuances of inheritance

[@hanwagu9967]

SIPC and FDIC do not do the same thing, so you shouldn't consider that SIPC is to brokerage securities and cash as FDIC is to deposit cash. SIPC covers "cash" in your brokerage cash/sweep/clearing account, because they are still considered securities being normally held in money market fund accounts. FDIC covers dollar for dollar in case of bank failure up to the limit. SIPC does not cover dollar for dollar in case of brokerage failure. It covers in case of loss, theft, or fraud. It covers the cost to repatriate your securities, or securities held as cash (e.g. cash in your money market fund sweep account) in non-commodity related cash accounts. In the case of brokerage money market fund, no, the brokerage is not investing the money however they want. You know what the money is being invested in because it is in the underlying money market mutual fund. It is booked as such, that's why it is considered securities and not covered by FDIC even though it is "cash".

[@GenXstacker]

This is an excellent question which has popped into my mind since most of my portfolio is at Vanguard.

[@norbertruijling6763]

Better 'style' would be to answer the questions right away, and then explain. Now I have to listen to the entire video to get the answer.

[@DreamBelieveTravel]

Thank you so much this is exactly what I was looking for. I have a Schwab account and a checking account and I bought a bunch of CDs. But it’s over 500,000 so I was concerned if they went under because their stock went down severely. I think it was last week. Thank you.

[@pejpm]

For context, their stock is still higher than it was 3 years ago

[@mikephilpot9857]

Very important topic. Thx for the video. 👍

[@nicholasmartinez6043]

This was the perfect video for my questions: thank you. I’ll continue to keep my cash in a vanguard money market account for the higher yield vs a bank account

[@rogerdodger8415]

The FDIC can insure against only a small portion of the countries banking system deposits. It's like your home insurance. If your neighborhood burns down, they can cover it, but if the entire city burns down, there's just not enough to cover it all.

[@rickspalding3047]

I'm not sure how a system collapse would happen but if that happened, that's all on the tax payers

[@harinair7066]

Thanks for making this video Rob! Question: Would we be protected if the custodian bank fails?

[@NewPragmatic]

Excellent explanation of SIPC. Highly recommended viewing for anyone with brokerage concerns (basically rest easy, but watch).

[@johncotton7058]

What about uninvested cash at a brokerage? Its swept into an account usually set up by the brokerage. Is that account FDIC or SIPC? Thanks, great and timely video, of course.

[@MaryBethMcCoy]

FDIC insured like a regular bank up to 250K.

[@rufuspipemos]

Vanguard does it best... when money comes over it automatically lands in a Government Money Market first, so it never sits in cash.

[@Alumnikiid]

SIPC protects the securities and “cash” in your brokerage account up to $500,000.

[@hanwagu9967]

@@MaryBethMcCoy no. it depends on what kind of sweep account.

[@MrHardrock]

ok!!!!! found you here!!!! Glad to see you back on your own channel. Great info today!!!! Totally slipped my mine that CS is publicly traded just like a normal bank or company.

[@lasalsera-x8d]

I think many of us now worry if our bank fails, will FDIC have enough money to cover after those banks failed and there might be more to come? I recently moved a big chunk of cash from my bank to my brokerage account. I needed to split my cash to keep it under $250K but also I wanted the money to be in a safer place. Someone told me brokerage accounts were safer than banks because they have more strict regulations. Is that true? Brokerage account, I mean is non-vested, just parked as a cash value.

[@bigpicturethinking5620]

You need to check how the “core” or “home” position is held in your particular instance. Many have sweeps which break out cash deposits to keep you below the $250 k threshold and some core prepositions are purchased funds and not deposits at all. Bottom line is there is no generic answer. Check your own brokerage to see precisely how your money is held.

[@randycarstens1100]

Good question I know for Robinhood cash is invested with several banks and fdic insured. Schwab is FDIC as well not SIPC. I am converting my Schwab Tbill ETF to actual Tbills that are reinvested automatically at maturity. Think this is safer as to avoid possible losses from derivatives and shady stuff at ETF.

[@randycarstens1100]

Custodian SVB LOL’s.

[@andrewdillon3520]

Just to note, FDIC may not have enough to cover all so lost funds will not be returned all at once rather it will most likely give back in installments depending on how great your losses are they will drag it out till the day you die and you will never recover everything.

[@bigpicturethinking5620]

@@andrewdillon3520 Lol ok get to your bunker quickly with your cash.

[@stephanie_beth]

TD Ameritrade was bought by Schwab. In May, my TD account will move to Schwab's servers, and I'm very concerned about money I keep in cash sweeps. Especially as Schwab is backstopped by a bank.

[@pgreenx]

All broker dealer financials are publicly available even if they are private companies. In fact, the broker dealer financials are separate from the non bd portion of schwabs books. Plus you have credit risk with a bd until trade settlement.

[@sheldonhall1295]

Excellent explanation of the management of funds. This week, I had been wondering about my retirement funds. Thank you!

[@wymandyer6261]

oh Rob you hit a home run on this,,,more than once ive had a bit of anxiety about this and you really confirmed words from some other experts ive talked with and eased my mind,,,thank you

[@me_and_my_dog9670]

Thank you for this show. I have been concerned about Schwab- I don’t have mutual funds but I do have stocks and hoping that I chose wisely.

[@IrfanKhan-mx6fl]

It is very simple; a Bank physically holds your cash, a broker is an intermediary that holds your investments…it is physical cash vs holding your investments. If the broker fails, you still have your investment, if a bank fails, your cash over FDIC limits is in jeopardy!

[@PLeejo]

They keep it separate by putting those monies in BANKS. THEIR bank can go stupid. Some of OUR brokerage account cash is in Wells Fargo. Not feeling secure.

[@CTChipmunk]

problem is if there are massive bank failures the FDIC only has something like $300 billion on hand to cover something like $9 trillion in deposits.

[@SportsIncorporated]

What I know about FDIC insurance goes back some years. The way it used to work was FDIC insurance wouldn't cover more than a major bank or two going down. In other words, FDIC insurance couldn't insure the whole system. (Of course, the government has stepped in.)

[@JK-rv9tp]

This is why all the shareholder documentation sent out by companies or funds comes directly to you. The broker is just acting as a custodian of your shares. If the broker was liquidated, the shares would just have to be transferred to another custodian.

[@spalace7919]

Great content. Thank you. 1 Question: What would happen if the Broker and Custodian both go belly-up and a person has over the SIPC Coverage?

[@BAYL-j5o]

what happens if you have money sitting in the account that you have not used yet.

[@summersnow7296]

seems to suggest that for amount above FDIC, it is safer to transfer to a solid broker and either buy money market funds or even just sit there than to leave them in a bank. I wouldn't have known that. Thank you.

[@darylwhetstone3959]

Excellent information provided!! Thank you for putting this information together for those of us that are not financial wizards, and lack a lot of understanding of the financial world.

[@lcdrpost]

Outstanding video! This answered most of my questions. Thank you for taking the time to research and create this video.

[@boriskasperov7718]

Thank you for taking the time to record this video. It was educational and reassuring.

[@rondean2733]

The risk is huge when you can't access your fund! Either by Government, Broker, or general liquidity! Hold physical gold and silver! And save broker fees.

[@davidb2206]

The SIPC, which is supposed to protect brokerage accounts, is a private, federally mandated nonprofit organization. It has a $2.5 billion line of credit with the U.S. Treasury. The U.S. government $34 trillion in debt.

[@w1swh1]

Thanks Rob. That's very reassuring as I have mutual fund assets in Schwab, Vanguard and Fidelity. As you said we don't want another Madoff!! I've watched the Netflix documentary twice now and it still sends shiver down my spine (where was the SEC?)

[@indigoindignation]

Thank you, thank you! I've been searching for the answer to this question for years! Finally I can breathe easier.

[@markus711]

FDIC has $124.5 billion on its balance sheet, with an additional $100 billion line of credit available from the U.S. Treasury for a total of $224.5 billion. That compares to a total of more than $22 trillion in the US banking system. Therefore FDIC assets cover only 1.26% of the deposits.

[@sdoken]

What about brokered CDs I bought at Schwab ? Some from unknown banks and some from Schwab itself, are they safe?

[@85jre]

Client holdings are held in trust and are not subject to creditors’ claims from Schwab creditors. They are kept separate and held in trust.

[@rajkurma-d9o]

I have small business 401k account at Vanguard. I came to know that my 401k account is not protected either by SIPC or any insurance. Vanguard confirmed that when I asked about what was mentioned in their communication. It was like this: "Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC." Vanguard said I cannot have my small business 401k created under 'Brokerage account' umbrella and hence they are not protected. Is this correct? How do I get any kind of insurance protection for this 401k account like my non-retirement brokerage account?

[@janesmith506]

Thanks for answering these questions. I never thought of asking them, but it's good to know the answers.

[@nicholastracy4915]

Hold assets outside the system. Be your own central bank. Put a portion of your portfolio into assets that are not simultaneously someone else's liability, which includes Federal Reserve Notes, as you can see for yourselves what little regard the Fed has for the purchasing power of the dollar. Your discernment for what to buy, but I am merely suggesting how to buy. Times of crisis hold great opportunity.

[@lindafriedmanschmidt4863]

Why does Fidelity use the Plaid system for money transfers? When a customer wants to transfer funds to a Fidelity Account the customer's bank routing number and account number is not sufficient for Fidelity (it is sufficient for Schwab). Fidelity now asks for customer's bank user name and password. I think this is none of their business and I would not give this to them.

[@sifridbassoon]

Thanks! I have money in Fidelity, but that's only because they handled stock options for my old employer.

[@peternolan6648]

Very good points, however...what about cash at brokerage accounts that might be swept into a cash account at Schwab. I have in excess of $250k in cash. Is that excess vulnerable if it is swept into Schwab banking cash each day. If so, how can I keep the cash in the brokerage and prevent any sweeps? Thanks for your great works from a retired controller/CFO.

[@drrwatcher]

Thank you for answering a question that has long been on my mind.

[@cfh3395]

The reason SCHD is dropping is 18% of its holdings are Financials which includes Regional Banks. You should do a video on that

[@jimdude5529]

SCHD should only be bought for the dividends. Fluctuations are of no concern.

[@vitawater4259]

They have a few regional banks in their portfolio. The brunt of their financials are large cap types, i.e. blackrock, JPMorgan, etc. In addition, the other 82% of the portfolio holdings are doing quite well. Let the divs come in this week.

[@hanwagu9967]

18% drop sounds like a good time to buy

[@z352kdaf8324]

That's were some brokers get in trouble - they don't keep things separate. And Schwab owns TDA now. ugh

[@jeanettelabarb6521]

Thank you so much for the clear explanation. You have put my mind at ease.

[@tzvassilev]

There is a huge difference between 1) owning a portfolio of stocks and bonds vs. 2) owning ETFs. In the first case, you are only exposed to the specific asset risks. In the second case, in addition to the asset risks (assets owned by the ETF) you will be exposed to liquidity risk in ETF primary and secondary markets and to counterparty risk in ETFs using derivatives and those engaging in securities lending. Personally, I have chosen to own stocks and bonds because there is no doubt who owns what. Also my stocks and bonds are not available for lending to short sellers, everything is under my control. I have no time and no desire to read 50 pages of fine print in ETF prospects. Also don't forget that even if everything looks good on paper you there is always a risk of fraud due to the misconduct of employees of the ETF issuer and potentially gaps in their processes. There are just too many things out of your control compared to the direct investment in stocks and bonds.

[@Denis-se5un]

Very good and informative information thank you. My question has been for a while Charles Schwab brokerage sweeps the money into their bank . So wouldn't your cash not invested in your brokerage account be subject to bank rules because of this?

[@fredflintstone1428]

So in a banking crisis, or a financial crisis, your actual 'fund' will be protected by the custodian.......it's just that it might not be worth much as the company's share price tumbles. That's reassuring to know......

[@jerrygallud8358]

What about Schwab's sweep account? I called them yesterday on this issue. I'm going to be in mostly cash soon until this debt ceiling crisis is over. What happens if I have millions sitting in Schwab's sweep account waiting to invest, and then Schwab fails for some unlikely reason. Well, I get a bunch of deceptive answers...."You'r protected to 500K per person...we have additional insurance with Lloyds of London. There is SPIC etc etc." Well, bottom line, only 500k is protected right? "Uh, yes" Is this your understanding too? Thanks.

[@Gadgeteer32952]

Good information and timely. I think the financial issues will continue. The country has too much debt. Now, we see still another bank fail (First Republic) and I believe there will be more. I think it entirely possible that we could see another Great Depression.

[@getinthespace7715]

My retirement investment options are extremely limited by my employer. I've got my money in a treasury based vanguard money market waiting for the stock market to tank. Vanguard has a unique structure, where it is owned by the fund shareholders. Vanguard operates more as a custodian, the conpany itself doesn't actually own anything and isn't publicly traded giving it significant stability. My risk is with the retirement account management company and the individual investments. Right now the previous investment I had is only up 3.6% from when I shifted to the money market that has a 2.8% return (5.2% annual) but almost no risk in comparison. If the market tanks, I'll buy in at the bottom and ride things back up.

[@cari3157]

I’ve heard FDIC only had .03¢ on the dollar if everyone tried to get their money at once. And since they’re insuring unapproved funds now too, they now have .01¢ per dollar. Is this true?

[@agrahazl]

great vid! This is a question I've had for awhile to the point of even holding cash from broker deposit because of not knowing. Excellent job.