Article Getting a Short Term Advantage in The Money Markets

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Dec 19, 2004
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When investors think about the capital markets, they typically ponder the merits of bonds, stocks or derivatives. Because it isn’t as sexy and doesn’t have the volatility of other securities, the money market is often far from the top of the list. Nevertheless, virtually all investors can use the money market to enhance their portfolios in one way or another. In this article, we’ll explain how investors can use the dependability of the money market to their advantage.
What Is It?The money market is a market that provides liquidity for individuals and institutions by dealing in short-term borrowing such as certificates of deposit, T-bills or other similar instruments with a maturity date of about one year or less. With that in mind, because the vehicles used in the money market are relatively safe when compared to their equity and debt counterparts, and are often backed by the full faith and credit of the U.S. government (such as with T-bills), the rate of return on a money...
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