| They may not be glamorous or bring extreme | | | | money market mutual fund. These are usually |
| returns. But then, they aren't meant to. | | | | funds that purchase short-term debt from |
| Recently, money market mutual funds have | | | | tax-free organizations, like state or local |
| found their way into a broad variety of | | | | government. While their yield is usually |
| investor's portfolios as their returns have | | | | lower, you have the potential of saving the |
| increased and their attractive reliability | | | | difference in taxes. |
| has continued. | | | | |
| | | | Many money market mutual funds also offer an |
| Between June 2004 and September 2005, money | | | | advantage if you're invested in several other |
| market yields increased from over a half a | | | | types of mutual funds within the same fund |
| percent, to 2.89 percent, according to an | | | | company. A money market mutual fund can act |
| Associated Press story in early-September | | | | as temporary storage if you sell off assets |
| 2005.1 A rather large jump to say the least. | | | | in a mutual fund and wish to keep them in the |
| | | | fund company before investing in another |
| Serving as a temporary investment vehicle for | | | | fund. In comparison to other options, this is |
| those not ready to invest, money market funds | | | | a relatively easy way to transfer money |
| are generally a short-term savings tool that, | | | | between funds and still potentially benefit |
| in comparison to many investments, is | | | | while you choose your next mutual fund |
| considered safer and more reliable. | | | | investment. |
| | | | |
| Using the advantages of a mutual fund, a | | | | Money market mutual funds can serve a variety |
| money market version typically invests in a | | | | of investors but can be most attractive to |
| variety of things including CDs, U.S. | | | | smaller investors. Many have easier |
| Treasury securities and debt-obligations. By | | | | withdrawal features including check writing |
| investing in a money market mutual fund, | | | | or wire transfer if you choose to close or |
| you're also benefiting from a possibility of | | | | move money from an account. Always consult |
| higher returns than those available from | | | | with a financial professional before deciding |
| individual investment in a CD or money market | | | | what investment moves to make. They may be |
| account. | | | | able to guide you to a better option. |
| | | | |
| An investment in a money market mutual fund | | | | Investing in a money market mutual fund is |
| is not insured or guaranteed by the Federal | | | | meant for an investor with a specific set of |
| Deposit Insurance Corporation (FDIC) or any | | | | circumstances and objectives. They certainly |
| other government agency. Although money | | | | aren't glamorous, and they won't help you |
| market funds seek to preserve the value of | | | | retire in style any time soon. But they may |
| your investment at $1.00 per share, it is | | | | be able to offer you tax savings, which is |
| possible to lose money by investing in these | | | | always attractive. |
| funds. | | | | |
| | | | 1 Meg Richards, "Money-Market Mutual Funds |
| Tax savings are another potential plus. You | | | | Surge," Associated Press, September 4, 2005. |
| may be able to take advantage of a tax-free | | | | |