Why Are Money Markets Safer than Stocks?

Consider money markets for a more stable investment.

When it comes to investing, there are no 100% guarantees in this world that you’re going to make a lot of money – or even keep your initial investment. Think about it – of all the typical and most popular ways in which people invest their hard-earned cash, which ones are sure things? Real estate? Gold? Oil? Stocks? Unless you’ve been living under a rock for the last three years, you know that the United States and the rest of the world are going through a time of intense financial instability and crisis. In fact, much of that instability can clearly be seen in the real estate and oil markets, and now in the stock market.


Nevertheless, there are some investment strategies that are considered much less risky than others. One of these is the money market. That’s a very broad term which includes many different kinds of investment vehicles and instruments that basically take your money and invest it in the money market. You will get a dividend just about every month on your earnings. The higher the money market rate you get, the better. After all, everyone wants to make as much money as they can, right? Money market rates fluctuate, so some months will be better than others.

Money markets are considered to be very safe – safer than the stock market – because stocks in an individual company can really go up or down, or even collapse should the company in question go bankrupt. With money markets, people are always trading, borrowing, and lending, so there’s less of a chance of the money drying up. Money market accounts, in fact, are insured by the FDIC.

Investing money into the fast-paced world of high finance is filled with rewards, challenges and plenty of concerns. Before you put your hard-earned cash into a money market or the stock market or any other type of investment, be sure to sit down with a qualified financial services industry expert and go over any and all questions you may have. When it comes to protecting yourself you can never be too curious.