CASH IS FOR

wimps, right? Well, not these days. With no bottom in sight for a free-falling stock market, those once-dowdy 5% to 6% risk-free returns are suddenly looking awfully tasty.

Or at least safe. There's no doubt that in an investing environment like this one, cash equivalents such as money-market funds and certificates of deposit, or CDs, offer what many other investments can't. They pretty much guarantee a rate of return. You know when you can get your money out and how much will be there. And the returns aren't bad especially if you've watched your stock investments follow the broad market 20% lower over the past year.

see "Portfolio Strategies for a Frightening Time. That said, however, if you've got the time to wait out the current stock malaise, there's no urgent reason to book losses in your tech portfolio merely to chase the safety of a money-market fund.

But if it makes you more comfortable to pull some money off the table, it's not like falling on your sword. "I wouldn't be embarrassed to tell anyone to take some money out of the market and put in cash," says David Blitzer, the chief investment strategist at Standard & Poor's. And if you've got new money last year's bonus, say, or a big tax refund parking it in cash for awhile might not be such a bad idea for a month or two. The idea of plunging new money into this quicksand market is enough to send you running for the Pepto.

You can do your own search on our rates page With annual percentage yields in the 5.5% range, these securities handily beat the rates of a plain-vanilla savings account. And unlike a CD, where you contract to lock up your money for a period of time, a money-market fund is highly liquid you can pull your money out whenever you want, penalty free. That's key if you want to keep your powder dry for a stock rebound.

It's no wonder money is flooding into money-market funds at an unprecedented rate. According to Peter Crane of iMoneyNet, a firm that tracks money-market data, asset flows into money-market funds are up $200 billion year-to-date. And that's not just due to individual investors. Because large corporations can get a better short-term return from a money-market fund than they can from other investments, they're moving into them en masse.

"In a period when stock prices are falling and corporate credit quality is weakening in a manner that might limit the potential returns from bonds, the price stability of money-market assets could be a favorable alternative," says John Puchalla, an economist at Moody's.

A CD is another option, of course, though normally a less-than-ideal one. You might get a slightly higher rate, but because you have to lock up your money for a prescribed period (three months, six months, a year, etc.), it hardly seems worth it. In this environment, however, CDs might make more sense than usual if you truly won't need your cash any time soon. The reason is this: CD rates tend to rise and fall with interest rates, so if the Federal Reserve resumes its rate-cutting next week as expected, it might make sense to lock in a CD rate now. Again, if you decide to go that route, our rates page can help you search for the best return.

Other options? Well, in the past we've recommended Treasury strips, or zero-coupon bonds, which are a little complicated, but usually offer a higher rate than a money-market fund. They also allow you to lock in a rate for a number of years, which makes them ideal for midterm goals like a college fund. But at the moment, strips are yielding less than your average money-market fund. Our view: Stick with the money markets. It's hard to go wrong.

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