People always look for safety, profit and liquidity when investing their money in any form of venture. While it may be possible to have the three, it is hard to have them together from one investment option. Most investments will give you higher profits while the risk of losing the value is high; others give you good returns but no liquidity. With that in mind, money market fund is one of the investment option that gives you safety for your money and liquidity. It is a low risk investment option that aims at protecting your money from the negative market forces that lower the value of your initial capital.
In summary, money market fund is a form of fixed income fund that usually concentrates on debt securities, which are characterized by their short period of maturity and low credit risks. Mutual funds are highly liquid, implying that an investor is free to cash their money once they are ready to go use it somewhere else. It is also a low risk venture and thus the interest rate is low.
The market fund is thus for those people or investors who are self-accomplished. It’s for those whose main aim is to protect their money and not to grow it within a short period. It is a good option for business people who are looking to store money temporarily before finalizing certain major deals like buying properties. Investors who have zero tolerance for financial market volatility find this option as a good way of investing their money too.
But where did this great idea originate from? Who is the pioneer behind this “safe heaven”? When such questions cross your mind, the answer is always Bruce Bent II. He is the brilliant businessman who brainstormed searching for safer financial options and came up with the first market money fund, The Reserve Fund, that aimed at giving people safety and liquidity; this was founded back in 1970. Bruce is also an accomplished family man with a wife and two sons. He graduated with bachelor’s degree in economics from St. John’s University in 1961. Bruce is the current Vice Chairman and President of Double Rock Corporation, a corporation that offers solutions in financial management and retirement services.
For more information on Bruce Bent II follow him on Twitter.