Or Vanguard could collapse from the inside because some C-level officer was dipping into customer funds to cover some bad investment, and everyone takes a haircut on the holdings. On top of the drop in market value because most vanguard customers invest in vanguard funds, which suddenly become a toxic asset. Your "safe" money market asset is considered equal and paid out pro-rata, sharing the loss of those mutual funds.
Meanwhile the FDIC insured savings accounts at the bank next door are just fine in the midst of this total and complete market meltdown, and those account holders decide it's time to diversify and pick up some cheap stocks.
That's just one scenario. “Low risk” is not the same as no risk, and the difference isn't important until it suddenly is.
Meanwhile the FDIC insured savings accounts at the bank next door are just fine in the midst of this total and complete market meltdown, and those account holders decide it's time to diversify and pick up some cheap stocks.
That's just one scenario. “Low risk” is not the same as no risk, and the difference isn't important until it suddenly is.