Money Market Fund
Why Every First Time Investor Should Consider The Money Market Fund.
Investing is one reliable way to gain financial freedom. In these times where economic uncertainty is prevalent and regular savings don’t seem to cut it anymore, investment opportunities such as stocks, treasury bills, mutual funds etc. have become popular. One of such investment options is the Money Market Fund, an investment option that is suited to all investors especially a first time investor.
A Money Market Fund is an open-ended mutual fund that deals in short-term securities such as treasury notes, bank bills and promissory notes etc. The fund is managed by experienced fund managers who are trained to optimize investors returns by deploying a balanced mix of portfolio investments to ensure that the money invested is safe and returns remain higher than the inflation rate.
Money Market Funds have a few qualities which make them the ideal investment for a first time investor. These include:
Before you determine your risk appetite as an investor, it is ideal to start with a low-risk investment such as a money market fund. This fund option is a popular choice among risk-averse investors. Preservation of capital is one the objectives of money market fund manager. What this means for an investor is that there little to no risk of losing capital.
Liquidity simply refers to how easy it is to convert the investment into cash. Money market funds are designed to provide maximum liquidity. With a Money Market Fund, you have access to your money whenever you want it with minimal exit charges.
Minimal Entry Requirement
The Money Market Fund is perfect for the individual looking to begin their journey in investment as you do not need to have a lot of money to start investing in the fund. You can start investing as little as N5,000 in some funds such as the First Ally Money Market Fund while other Money Market Funds may require a minimum of N10,000.