When Should You Invest in Money Market Funds?

Due to the structure of money market funds, as long as you are not carrying a huge assortment of bad debt and have budgeted for a savings allocation, anytime is a good time to invest in money market funds. Since Congress passed the  Investment Company Act of 1940, money market funds have been a highly regulated investment instrument allowing even the most skittish investors to feel comfortable with this type of investment option. If you have the desire and liquid assets available feel free to invest in money market funds any time after completing your due diligence process.

Money market funds offer investors a wide array of investment opportunities. Unlike other trendier options, such as stocks, bonds, gold, and other options, they are fairly constant. Everyday investors will find that having  money market funds are easy and simple that they will feel immediately comfortable with. Professional money market fund managers take care of the investment package. It is their goal to ensure the Net Asset Value remains at $1 per share and all you need to do is purchase the shares.

Not to say that there are no risks involved in money market investments, you need to check out the prospectus on the potential money market fund you are considering to invest in prior to transferring any money into a money market fund account.

Building Wealth

Investing and saving money is an essential part to ensuring your future financial health. The habit of savings can start in childhood with simple math skills and a cute piggy-bank and should be carried out at every stage of life. Of course the piggy-bank of yesterday is not an effective investment instrument of adulthood. Some tools that can be used to easily and safely diversify the investment portfolio of an adult are savings accounts, CDs, and money market funds.

About the Author

GOBankingRates Staff

These articles are written by the in-house GOBankingRates team.

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