There are two reasons for having some of your investment portfolio money in a money market fund.
Asset Allocation
One reason for having some of your investment funds in a money market fund is to hedge against declines in other asset classes. For example, if you thought there was a high probability of a stock market decline [...] Read more »
You may think of bonds only as a way to earn income. Or maybe you turned to short-term CDs or money market funds for safety during the equity and credit market volatility last year. But fixed-income investments can also play an important role over the long term—they can help contribute return and reduce overall risk and volatility in a [...] Read more »
When we refer to “equities” we are referring to stock in companies.
The first thing to recognize about equities is where their value comes from. Stocks are worth the present value of the future cash flows they will deliver to their owners. Since stocks do not have an expiration date and dividends grow over time, the [...] Read more »