Introduction
When we talk about money, a lot of ideas come into our mind. These ideas could be ranging from how to spend, how to get and perhaps how to manage to how to save. But, what about money fund? Is there something important about it that perhaps we ought to know?
The money funds
Therefore let us have a look at exactly what this money fund is all about. When we talk about money funds, we are referring to some liquid funds that are perhaps invested especially in short term securities. The good thing with these funds is the fact that they can be purchased by individuals both from mutual fund companies or even broker age firms. What perhaps makes it different from the savings account could be the fact that its safety is a surety.
It can also be classified further as a certain type of mutual fund. May be we could be asking ourselves how this is made possible. It is therefore possible through the price theory that is set perhaps among individuals. It is so obvious that the price is bound to fluctuate, therefore through a mutual consent; we can easily get our way on such situations.
Money fund on the other hand, have been noticed to have achieved stability in terms of price. This on the hand too, has been made possible short term investment holding. On the same note, the money fund has perhaps been noted to have maintained its one dollar share price. This could also be saying something about its stability. Consistence brings stability in normal cases. Regular fluctuations though, lead to instability.
Though, there was some bad news about its stability in the year 2008. It was realized that, its stability was otherwise under threat. This was perhaps due to the commercial paper that was issued earlier on by a certain brother from the Lehman and on the same note, the money fund became worthless.
In normal cases, assets always increase when there is a typical increase in the political tension. This is a case that can be realized even throughout the entire world. This is a situation that sets in perhaps when the investors are tirelessly looking for the so called safe havens for their on cash.
Also
Whether the yields are low or whether they are high, management is one area that should be stressed. This is a factor that has always been put into consideration by the money fund. Perhaps this could one of the reasons that perhaps have contributed to their commendable price stability. Or it could be the reason as to why their yields have been so consistent.
Still
Reducing to the matters of companies, the various companies use these money funds to manage the operation of their cash accounts. Money funds also offers insurance, from the above, we have been in a position to analyze the money fund, its profile, what dictates its stability and how their management is. It is quite reliable; no fluctuation expected and always gives consistent and stable results.
