Today the topic appears again in the news. The Feds may actually consider going to negative interest rates. I heard an audiocast meeting with Scott Burns, a financial analyst who writes for the Dallas Morning News, where he discusses the implications of a negative interest rate. He mentioned that GNMA funds or other substitutes might need to be considered instead of short-term bond funds (especially treasury funds) in a portfolio.

Most of our portfolios use SHY or a similar fund as a parking place when momentum fails to deliver a suitable asset for purchase. Negative interest rates would make SHY undesirable. Anybody have any thoughts about this?