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Investors have tough choices now with yields for money market funds on the rise

Published Sun, Feb 5 20238:40 AM EST

Anna Gleason @anna_gle

The " Fast Money " traders are looking to capitalize on the rising yields in money market funds and dividend-paying stocks. The largest taxable money market funds, as ranked on Crane Data's 100 list, are yielding an average 4.18% as of Feb. 2 — returns not seen since the financial crisis. It comes as quality dividend-paying stocks are also generating solid returns. But which is better? In Tim Seymour's case, it's cash. "That's a lot better than investing in an equity that's got a 4.5% dividend yield," the Seymour Asset Management CIO said. Money market funds jumped to an all-time record $4.82 trillion in total assets the week ended Feb. 1, according to the Investment Company Institute. Higher-return dividend payers, which carry more risk, may be an option for investors looking for safety right now, too. "We're in the high-quality dividend camp," said Michael Contopoulos, Richard Bernstein Advisors' director of fixed Income. "They did great last year, certainly on a relative basis to the equity market." VIG 1Y mountain Vanguard Dividend Appreciation ETF Metropolitan Capital CEO Karen Finerman urged investors not to buy a stock based on high dividend payouts alone. "I won't hold it against them, however, if they do have a great dividend," Finerman added. Disclaimer

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