| For those who do not want to take risk in the | | | | Company Act of 1940. Eligible money market |
| equity market and yet want to avail the benefits | | | | securities include commercial paper, repurchase |
| of stock market returns investing in money | | | | agreements, short-term bonds or other money |
| market funds is a good idea. Money market funds | | | | funds. Money market securities should be highly |
| work in a very explicit way preserving your | | | | liquid, and have a stable value. For investing in |
| capital and yield a modest return. Their goal is to | | | | money market funds one needs to have a |
| maintain a net asset value (NAV) of exactly $1.00. | | | | money market account and this can be obtained |
| Fund owners advertise it as high yield bank | | | | from banks easily. |
| accounts. | | | | Even money market funds are dealt by |
| The only disadvantage is money market funds do | | | | professionals so the dividend that you get paid is |
| not have any insurance against loss. | | | | after they have calculated for their own survival |
| Indexes that are subset of original indexes | | | | as a company in the market. It is comparatively |
| Things to consider before investing in money | | | | less than what the banks will pay you. |
| market funds: | | | | Should you invest in money market funds? That |
| 1) These funds are for short period of time | | | | answer, of course, if entirely up to you. Keep in |
| usually 60 days, always less than 180 days. They | | | | mind that you will certainly never become wealthy |
| do not witness high price fluctuation. | | | | investing in this avenue. The best choice, of |
| 2) You can track your returns daily as Money | | | | course, is to become financially educated so that |
| Market Funds declare dividends daily, though they | | | | you can take advantage of the really lucrative |
| are only paid out monthly. If you wish to | | | | stocks on the market and achieve financial |
| withdraw or cash in totally in middle of the month, | | | | freedom. |
| you'll receive the cumulative declared dividends. | | | | Of course, not everybody has the time or |
| Money market funds are also known as principal | | | | patience for this. Therefore, if you absolutely feel |
| stability funds that limit ones exposure to losses | | | | you can't take the time to become financially |
| due to credit, market, and liquidity risks. Money | | | | educated and learn about finances and how to |
| market funds are regulated by the U.S. Securities | | | | make money with the market, then investing in |
| and Exchange Commission's (SEC) Investment | | | | money market funds may be the choice for you. |