Investing In Money Market Funds Is More Secure And Safe

Investing In Money Market Funds Is More Secure And Safe

The terms “volatility” and “safe investments” do not go hand in hand. They never did. But especially in the 21st Century stock market, stocks with a degree of volatility are riskier than ever. While you may not see any other way for your investment if there are any future plans to retire, keep in mind that it’s not uncommon for stocks of today to swing 5 and 10 points in a whole day. Case in point: Netflix, one of the safest bets in home entertainment, recently lost close to 80 points in a span of one week. In a year’s time it went from nearly $300 per share to $128. Imagine how quickly you could have lost a significant amount of money, on a stock that many analysts considered “safe.” That’s why you should consider money market funds for investing.

Money market funds are much safer forms of investment. While you will not get rich overnight, you can benefit from the reality that money market fund investments are considerably safer than what you will find in stocks and mutual funds. Slow and steady growth can really add up over time as gains compound through the years. Many people, who thought they were going to retire on stocks and mutual funds, are now faced with the reality they will need to continue working. They realized losses of significant chunks of their portfolio as the economy took a turn for the worse, and they have never found their way back to where they were.

With money market funds, you can rest easy knowing that your assets are protected and enrolled in projects and companies that exercise the safety first rule of thumb for investing. As government interest rates improve, so, too, will the return on your investment. And as long as the government is running the show, you will never realize losses.

The only problem with money market funds is that a poorly performing one can fail to keep up with the rate of inflation. But like real estate, money market funds have a cycle that they run on from times of great prosperity to lesser prosperity. With interest rates currently at an all time low, you can rest easy knowing that improvements have nowhere else to go but up.

And one more advantage of the money market fund is that it generally stays out front of bonds in a down economy. While the bond market is also struggling to pay decent returns on investment, the money market fund is giving many investors more return than they can find anywhere else.

If you’re ready to invest, but you’re conservative and don’t know where to start, money market funds can be a great way of watching your principle grow.