How much is too much

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Why do you think this would matter?

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I've wondered the same thing before. For me, I have all my accounts through etrade. What if there is another financial meltdown a la 2008? You had some huge institutions disappear overnight - Wachovia, Bear Sterns, etc.

So if that happens again and etrade goes the way of the dodo bird, what happens to all of my investment accounts?

Vanguard brokerage has $500,000 of SIPC coverage on each account. In the case of insolvency listed securities recovered will be transferred to another broker. That coverage is for unrecoverable securities. There is a $250,00 0 limit on cash. I don't know why anybody would keep that much cash in a brokerage account. These firms are audited regularly. Other than outright fraud I don't know how your securities could not be recovered. These are my thoughts and understanding. I stand ready to be corrected and enlightened.

and I have 4 separate accounts so that would be 2 mil SIPC
coverage aggregate if it came to that.

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What happens to say like the vanguard managed mutual funds if vanguard went out?

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Unless there is fraud, the underlying assets funding their mutual fund should still be there.

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There is a $250,00 0 limit on cash. I don't know why anybody would keep that much cash in a brokerage account.

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Professional “Trader Tax Status” traders (especially options and futures traders) will keep larger than average cash balances for margin and/or buying power reduction reasons. If we hold positions longer term for dividend, interest or (longer term) appreciation, our IRS status may be disqualified and we’re considered “investors”.

But I agree with you, in that if Vanguard, or any of the major brokerages were to go under (brokerages, not investment banks), we’d have MUCH bigger things to worry about than just what would happen to our shares or cash. I’d be offering TD Money Talk posters a 20% discount to hunt deer on my land (just gotta bring your own rifle… but you will have to purchase the ammo from the Jag_Warrior Ammo Store ).

Yeah, a certain amount of interest will be gained from the sweep account. But as for holding actual securities such as T-bills, notes, etc., I doubt it, but I can’t say for certain. The advice I was given was to establish a separate trading account where I would hold or trade stocks, ETFs, T-notes, bills, etc. That’s what I did (at the same brokerage).

So probably a better course in my case (to protect that tax status) would be to transfer whatever free cash that I’d look to gain interest on into that new account and buy notes or bills with it. And then transfer it back & forth to the TTS account as need be for buying power/margin purposes. Since that account will have mark-to-market requirements, I want to keep that one as clean & simple as possible.