Why You Should Invest in Money Market Funds! In the wary world of the market, money market funds are a popular way to invest your money in a relatively safe way usually for short term. Used by both individuals and businesses, money market accounts are used as a shortterm cash management tool. For the most part, money market funds are designed as a shortterm investment (less than one year); many accounts mature in 30-90 days. There are some money market accounts designed to save money that is not for immediate use, but not for long-term accounts, such as retirement accounts. Richard Cayne Meyer can help consult on an account for your needs.
Stability It’s important to understand how money market funds (also known as money market deposit accounts) are set up before investing in one. These funds are actually securities that have been backed to keep the share price at $1 per share. It’s rare that it should dip below that mark; it’s only happened a handful of times since the advent of money market funds in the early 1970s. Richard Cayne mentions one of the advantages of money market funds is that unlike other financial institutions, the $1-per-share price makes it one of the more stable funds to invest in. It’s often considered a safer way to invest your money than in stocks and bonds that fluctuate with the market.
Higher Yields In many cases, these money market accounts are preferred over setting up a regular saving account at your bank because money market accounts often yield a higher interest rate. It’s certainly dependent on the type of bank and in some cases, the amount you invest. Money market funds which Richard Cayne can help consult upon may offer several options for saving money with more stability and higher yields.
http://meyerjapan.com/en/richard-cayne
Liquidity To refer to a fund’s or account’s liquidity means its ability to be bought and sold. Certain kinds of funds are not easily sold or traded, perhaps because of the type of account it is, the terms of the account, or that there may not be many people who are willing to invest in a certain type of market. Generally, Richard Cayne explains money market funds are designed to limit the exposure to the risks of narrow liquidity.
http://meyerjapan.com/en/richard-cayne
Very Low Fees
Because fund management is not as complex as it can be for other types of mutual funds, these funds can charge lower fees and expenses.
http://meyerjapan.com/en/richard-cayne
Daily Valuation
Dividends are credited to your account daily, which ensures that your earnings are always up-to-date and available.
http://meyerjapan.com/en/richard-cayne
Lower Minimum Investments
Money market mutual funds generally offer lower initial investment minimums than other investments.
http://meyerjapan.com/en/richard-cayne
Check Writing
Many money market funds allow you to write checks against the balance, although there can be limits on this privilege.
http://meyerjapan.com/en/richard-cayne
Competitive Interest Rates
During a high-interest-rate environment, money market mutual funds can offer competitive yields providing returns higher than bank savings and money market accounts.
http://meyerjapan.com/en/richard-cayne
High Quality, Low Market Risk
Low Market Risk
Money market investments generally have a high credit quality, which means that there is little risk that their issuers will not be able to repay their debt. Because of this high quality, they are considered low-risk investments. Money market mutual funds pool these securities in one investment vehicle that brings low-risk opportunities to the everyday investor.
http://meyerjapan.com/en/richard-cayne