| Money market funds are fantastic investments | | | | because they money is locked in for a longer |
| for those who want to put some money away | | | | period of time. |
| without worrying about the risk that the stock | | | | So between the money market accounts and a |
| markets bring. So while you cannot anticipate | | | | trading account, is a money market account. |
| getting a large return on this type of investment, | | | | Professional managers invest in bonds, t-bills and |
| you can take comfort in having a stable return on | | | | government treasury notes. Smart money |
| your efforts. Before investing in money market | | | | managers will trade these vehicles, knowing that |
| funds, here are some things to consider. | | | | when interest rates move lower, the bonds they |
| Lets have a look at what money market funds | | | | currently hold are worth more and can be sold |
| are. A smart investor knows where he or she is | | | | for a higher price before they expire. On the |
| putting their hard earned money before they | | | | other hand, if interest rates move higher, then |
| invest it. Getting the right information is key to | | | | their position is not as valuable. By trading these |
| helping you make the right financial decision for | | | | traditionally static investments, money managers |
| you. So before you open an account, let this be a | | | | can usually get a higher return on investment than |
| starter guide for you, but of course, talk to a | | | | the average rate of return of their holdings. |
| financial advisor to make sure you get as many | | | | Money market funds are ideal for those who |
| facts and figures as you can before making a | | | | value stability over a higher rate of return. If you |
| decision. | | | | are relying on your savings, this is the perfect |
| Money market funds are very close to mutual | | | | investment vehicle. Even for those investors willing |
| funds but without the risk. The lack of risk of | | | | to take more risk, money market funds still play |
| course means a lack of surprise when you get | | | | an important role. A good rule of thumb is to |
| your statement. The stock market can be a | | | | have a position in money market type |
| rollercoaster sometimes, with money market | | | | investments that is equal to your current age. If |
| funds, you can be assured that you'll have more | | | | you are 35, then 35% of your portfolio should |
| of your money. That said, there is no guarantee | | | | hold these types of investments. |
| on your return. | | | | One final benefit to these accounts: you dont |
| There is a clear distinction between money | | | | need a lot of money to open one up. Its perfect |
| market funds, and a money market account. A | | | | for your children's savings accounts as well as |
| money market account is just a savings account | | | | your own portfolio. Talk to your financial advisor |
| that is opened at your bank. It offers a higher | | | | for more details. |
| rate of return than your average bank account | | | | |