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MONEY MARKET FUNDS Money Market Funds are simply co-mingled funds that invest in short term securities of a low risk nature. Since these funds invest primarily in securities issued by the U.S. government, banking institutions and prime rate corporations, they are considered quite safe for the average investor. The return, or yield, on money market funds has averaged between one to two points under the current prime rate. The return when compared to other investment vehicles may be equal to, above or below, depending on prevailing interest rates. Like all managed funds, money is gathered from many different investors, and the resulting pool of cash is used to acquire particular securities. Each fund buys various government and bank notes and the details of these investments are contained in the fund’s prospectus that each purchaser must receive and read prior to making an investment. People with years of experience in this field typically manage these funds. Their experience and the fund’s past performance are also spelled out in the prospectus. However, historical performance does not guarantee future performance. Some of these money market funds require an initial investment as low as $500, others require $5,000. After making the first investment, you may usually then make additional contributions of a lesser amount. Another attractive feature of money market funds is that they are liquid. You may withdraw money when needed quite quickly. Some funds even provide investors with a check writing privilege that allows them to write checks on the investment. When the draft is presented for payment, an appropriate amount of the fund is liquidated. The investor’s money has earned interest during this period of float. No other investment gives the individual investor this combination of safety, market sensitive earnings and liquidity. |
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Securities offered through Sigma Financial Corporation. A registered broker/dealer. Member FINRA & SIPC.Planning Services offered through Sigma Planning Corporation, a registered investment advisor.Any information contained on this site does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser licensed in your state. We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals. IRS Circular 230 Disclaimer: To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein. Asset allocation, diversification and rebalancing do not assure a profit or protect against loss in declining markets. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance is no guarantee of future results. Investment products, insurance and annuity products:
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