Over the last several installments, this blog has focused on other types of investments such as Life Insurance in last weeks article. This differs to what we usually focus on: stocks. The truth of the matter is simply that stocks, as much press as they get, are only one small type of investment.
There are dozens of other things you can do with your money. In order to help you decide which are best for you, we’ve been examining each type of investment in turn.
Money Market Securities
This time we’re going to be discussing money market securities. Much like bonds, money market securities are based on fixed income. Unlike bonds, however, money market securities are intended as short term investments and typically mature after only a year or so.
The only drawback really to Money Market Securities is that they typically are only available in high denominations. This puts them fairly beyond the reach of the majority of amateur investors. However, there is a way that many people have started investing in money market securities who would not otherwise be able to do so.
With the advent of money market mutual funds and money market bank accounts, investors can put money into these types of investments, which is then combined with the contributions of hundreds or thousands of other investors and used to purchased money market securities straight out. Obviously, the proceeds are then split up.
Low Risk And Short Term
Money market investments are usually considered to be very low risk because they’re such short term, and because they’re founded in secure enterprises such as government institutions.
You can buy and sell money market securities through most regular stock brokers. However, as we mentioned, you’ll most likely need to start out by investing in a money market mutual fund, which can be done for just a few hundred dollars. In addition to being more affordable, it will also give you a taste of the behavior of Money Market Securities to let you know whether or not you’ll be interested in pursuing them in the future.
See you next week for part 9 of Investments.
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2009
{ 3 comments… read them below or add one }
Hi Sean,
Again, I haven’t heard of money market securities. But, if it only costs a few hundred dollars to get started in a money market mutual fund, then maybe that’s the best place to learn all about them.
That’s such a small amount of money to invest. It’s not going to hurt if you lose it.
Hi Jazz
What are your investment choices for a diversifed portfolio?
I know I am to diversify my portfolio but at the moment I would prefer some buy and hold stocks, property and I plan to build some online businesses that I can flip later on.
It is good to know what Money Market Securities are as another alternative, however I need to be investing in something that is fun as well.