A money market fund provides investors with a safe place to invest easily accessible cash-equivalent assets and are characterised as low-risk, low-return investments.

However even Money Market Funds (Reserve Money Fund), which are normally considered extremely conservative, have not escaped unharmed. In the recent money market meltdown for example if you put one dollar into one of these, you might risk only having e.g. 98 cents left, although this was supposed to be the safest investment after a normal deposit (or cash).

The losses in the Money Market Funds are related to commercial paper from e.g. LEH, which is now going bankrupt.

Investing In Money Market Funds – Are They For You? 

Money market funds are fantastic investments for those who want to put some money away without worrying about the risk that the stock markets bring. So while you cannot anticipate getting a large return on this type of investment, you can take comfort in having a stable return on your efforts. Before investing in money market funds, here are some things to consider.

Lets have a look at what money market funds are. A smart investor knows where he or she is putting their hard earned money before they invest it. Getting the right information is key to helping you make the right financial decision for you. So before you open an account, let this be a starter guide for you, but of course, talk to a financial advisor to make sure you get as many facts and figures as you can before making a decision.

Money market funds are very close to mutual funds but without the risk. The lack of risk of course means a lack of surprise when you get your statement. The stock market can be a rollercoaster sometimes, with money market funds, you can be assured that you’ll have more of your money. That said, there is no guarantee on your return.

There is a clear distinction between money market funds, and a money market account. A money market account is just a savings account that is opened at your bank. It offers a higher rate of return than your average bank account because they money is locked in for a longer period of time.

So between the money market accounts and a trading account, is a money market account. Professional managers invest in bonds, t-bills and government treasury notes. Smart money managers will trade these vehicles, knowing that when interest rates move lower, the bonds they currently hold are worth more and can be sold for a higher price before they expire. On the other hand, if interest rates move higher, then their position is not as valuable. By trading these traditionally static investments, money managers can usually get a higher return on investment than the average rate of return of their holdings.

Money market funds are ideal for those who value stability over a higher rate of return. If you are relying on your savings, this is the perfect investment vehicle. Even for those investors willing to take more risk, money market funds still play an important role. A good rule of thumb is to have a position in money market type investments that is equal to your current age. If you are 35, then 35% of your portfolio should hold these types of investments.

One final benefit to these accounts: you dont need a lot of money to open one up. Its perfect for your children’s savings accounts as well as your own portfolio. Talk to your financial advisor for more details.

Visit us today for more information on investing in money market funds and other tips on stock market investing.

By Christopher Smith Published: 8/16/2007

Best Money Market Accounts (MMA) and High Yield Bank Rates
Updated List Of The Best Money Market Savings Account Rates Below Amidst the current economic recession…

Kanjorski and the Money Market Funds: The Facts – Finance Blog
With the Kanjorski Meme still spreading (see Ben Smith, Andrew Leonard, Moldbug, and more), I think I’m finally able to squash it with some hard figures…

Investing in Bonds is usually a safe form of investment but it is long term with the shortest investment being one year. You cannot get your money back until the bond matures. 

Bond Investing
by: Jakob Jelling

Bond investing is the safest way to invest long term.

One of the safest ways to invest is in bonds. If you are thinking about investing in bonds, chances are you are making a very good decision. You should be able to make a little bit of money on your investments – and you are not very likely to lose any money in the deal. However, while the stock market is confusing, the bond market is too. Therefore, before you start investing in the bond market, you should do some research and make sure you can find out what you need to know about bonds.

There are several different bond markets. One of the most well known and easiest bond markets to get into is that of municipal securities. These bond markets are essentially based around the buying and selling of bonds in states or cities. Usually the money from these bonds are initially used to build new schools or other public systems. Therefore, not only will you be investing in bonds but you’ll also be able to help your area build schools and other structures that it needs.

Bond investing does not have to be done on the local level. Another type of bonds you can buy are from the federal government. These bonds are usually pretty easy to buy and usually can be used for many years afterward. The treasury securities market, for instance, has bonds that will not mature for more than ten years.

Bond investing works the same way as most other types of investments. You put your money in, get your bond, and then you cannot get your money back until the bond matures. Therefore, bond investing is strictly a long-term investment market. However, there are several different time lengths that you can buy bonds for. Some of the shortest bonds will mature after one year. These are the shortest bond lengths, and usually will not allow you to earn very much money on the bond.

Other types of bonds are longer. If you invest in an extremely long term bond (ten or more years) then you’ll stand a chance of making a fairly decent amount of money. Most bonds also have a fixed value that they are worth. Instead of deciding exactly how much money you would like to give to a school, bank, or other organization for bonds, you need to buy a certain number of bonds that have fixed prices at first.

Finally, if you are thinking about bond investing, realize that you can sell your bonds before the maturity date – but you will not get as much money as you would have, and might even end up losing money in a deal like that,

About The Author
Jakob Jelling is the founder of Cashbazar.com. Go to http://www.cashbazar.com/investing.shtml and learn how to invest your money!
This article was posted on September 19, 2005

Some videos about investing in bonds.

Investing in Bonds Part I 

 Investing in Bonds Part II

Investing Notes: Insight into bonds
Insight into bonds. Published: 2009/02/11. Find out what is a bond; why invest in it; and what to watch out for when investing in bonds.

The 5 elements of a municipal bond trade
The 2 more complicated components: Yield and Price. Investors should fully understand the concepts of yield and price before investing in bonds.

Investing your money in Small Cap Stocks can lead to high returns if you are not too greedy but you need to understand the stock market. 

Learn to Invest Money in Small Cap Stocks and Make Triple Digit Profits (Part Four)
 by: John Kim

Ever hear of no risk, no reward? Well, buying riskier small cap stocks that could return triple digit gains doesn’t have to be a risky proposition. In the first three articles of this small and micro cap series, the first four rules focused on buying strategies. In this last article, the last and fifth rule will cover selling strategies.

Rule Number Five: Remove emotions from your decisions with disciplined selling strategies.

So now that we’ve covered how to buy in to such stocks, let’s review selling strategies because they are just as important. With selling, always limit your downside with stop losses of 10%-15% in long positions and stop losses of 25% with options. Using this strategy eliminates much of the risk from attempting to capitalize on double digit and triple digit gains. In fact, once you become good at identifying opportunities, having winning pick percentages of 70%-85% would not be unusual. And if you attain these percentages, the 15% of picks you lose several hundred dollars in becomes irrelevant when offset by your huge gains. In reviewing what to do about gains, just abide by one rule.

Don’t get greedy and always lock in gains.

If you don’t get greedy, there is no way you should not make money from a stock that has experienced explosive growth. But this scenario does happen. And only one thing causes this to happen. Greed. People will watch 100% profits turn into 20% losses because of greed.

Just as you did with your buy in price, have a predetermined selling price. As opposed to the buy in price range, I would choose a more specific price. For example, let’s consider stock YYY again and assume you bought the stock for $3 a share. Say you set your goal at $5 a share, a 67% increase, but that it blows right through that price two weeks later.

Now what do you do? Hold on or sell?

With sell strategies of rapidly rising stocks, the picture becomes slightly murkier than with sell strategies of stocks that are falling. When a stock passes through your 15% stop loss order (see part I of this article), it will sell automatically, no questions asked, with all emotions removed from that decision. But what do you do when the stock is shooting skyward with seemingly unlimited upside? It depends on what’s driving the price up. If pure speculation is the only thing driving the price, sell half your position and then put trailing stop losses of 20% on the remaining half. In other words, now that stock YYY has risen to $5 a share from my original buy-in price of $3 a share, I sell half my position, and my stop loss price on the remaining half has now moved up to $4.25 a share. This way I’ve locked in my predetermined 67% gain on half of my position of YYY and the least amount of profit I can make on the remaining half is 42%.

Now if earnings and sales are driving the price up, I may take another strategy. Instead of selling half of my position in YYY, I’ll hold onto my entire position, but again institute a trailing stop loss of 20%, moving my stop loss price-point up to $4.25. This is riskier than the first strategy, but the important thing to note is that I am still locking in gains. In this scenario, I still guarantee myself a 42% gain no matter what happens with the stock from here on out.

The key, and I can’t emphasize this enough, is to always take gains off the table or to lock them in with trailing stops. By doing this, you remove your emotions from your decisions. Formulate a disciplined sell strategy and you’ll make a lot more money than you would by trying to forecast the direction of the small and micro-cap stocks you invest in. Plus you’ll save a lot of money on the psychiatrist you won’t have to hire due to all the unnecessary stress you would have caused yourself by not employing these strategies.

So to summarize, always limit your downside and lock in gains with stop loss orders when investing in small and micro cap stocks and you can invest in stocks with enormous potential without the stress associated with the enormous risk of some of these stocks.

About The Author
John Kim is the founder of Global Market Opportunities. He has over thirteen years of experience in finance and financial services, and has earned a BA in Neurobiology from the University of Pennsylvania, a Master in Public Affairs from the University of Texas at Austin, and an MBA with a concentration in finance from the McCombs Business School, University of Texas at Austin. To learn how to discover small and micro cap stocks that consistently and significantly beat the market indices, click http://www.globalmarket-opps.org.
© 2006 Global Market Opportunities
This article was posted on April 18, 2006

Other articles on Small Cap Investment

Agoracom: Small Cap Investment
VALUE INVESTING — The art of buying low and selling lower. P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing.